$XRP

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Reasons Why #XRP May Experience a Sharp Decline Soon

XRP Traders Give Up: Exiting US$222 Million Indicates Fear

The Estimated Leverage Ratio (ELR) of XRP declining on the leading exchange Binance confirms declining investor confidence and reduced risk appetite. According to CryptoQuant, the current ELR stands at 0.36 — the lowest weekly close in the past month.

The ELR of an asset measures the average amount of leverage traders use to make trades on a cryptocurrency exchange. It is calculated by dividing the open interest of the asset by the exchange reserves for that currency.

The decline in XRP's ELR indicates a reduced risk appetite among traders. It suggests that investors are becoming more cautious about the short-term prospects of the token and are avoiding high-leverage positions that could amplify potential losses.

This trend is no different among spot market participants. According to Coinglass data, XRP has recorded a net outflow exceeding US$222 million since July 29, indicating a persistent sell-side dominance and weak buying pressure.

When an asset records a negative net spot flow, traders sell their holdings and take profits, while fewer buyers come in to replace them.

This trend could worsen the current downward trend of XRP, as demand for the asset decreases while its supply increases.

XRP Bears Approaching US$2.71—But Breakout at US$3.39 Still in Sight

As selling pressure increases, XRP is at risk of falling to US$2.71. If this support floor fails to hold, this altcoin could experience a sharper decline to US$2.50.