The price of Ripple has risen.

by 4% over the past seven days, benefiting from a wave of improved sentiment in the broader altcoin market.

However, despite this upward momentum, key on-chain indicators suggest that the rally may soon lose strength as holders look to take profits.

XRP rises 4% this week - but traders are quietly exiting the market.

Glassnode data reveals a steady increase in the change of XRP's net position on exchanges over the past week. On-chain data shows that this metric, which tracks the net amount of tokens moving to centralized exchanges, reached an eight-month high of 283 million XRP on July 7.

Change in XRP's net position on exchanges.

The timing is notable, as the increase in inflows to exchanges coincides with the recent rise in XRP's price. This suggests that many traders appear to be using the rally as an opportunity to exit positions, exerting some downward pressure on the token.

Furthermore, despite the rise, the Chaikin Money Flow (CMF) indicator has gradually trended downward, creating a bearish divergence with the token's price. As of the time of writing, this indicator stands at 0.01, on the verge of dipping below the zero line.

The CMF indicator measures how money flows into and out of the asset. When its value is positive, it signals increasing demand and upward price momentum. Conversely, negative CMF readings indicate strengthening selling pressure and rising bearish sentiment.

XRP's CMF indicator.

While XRP's CMF indicator has not yet dipped below the zero line, its continued decline suggests a weakening accumulation. This trend often precedes a bearish reversal, and in XRP's case, such an outcome appears likely unless new demand enters the market to absorb the increasing supply.

Losing this support could lead to a drop to $2.14.

On the daily chart, XRP is retesting the lower line of the ascending channel it has been in over the past week.

This channel is formed when the asset price consistently achieves higher highs and higher lows between two ascending parallel trend lines. The upper line acts as dynamic resistance, while the lower line serves as dynamic support.

Therefore, when the price begins to test the lower bound, especially after a strong rally, it often signals exhaustion of upward momentum.

A critical break below this lower support line is a bearish signal, indicating that buyers can no longer sustain the trend. If this occurs, XRP risks dropping to $2.14.

XRP price analysis.

However, if the bulls regain control and demand rises, they could push the price of XRP to $2.35.