In the past week, the price of XRP has surged nearly 10%, taking full advantage of the strong recovery wave in the cryptocurrency market as the total global market capitalization surpassed $4.13 trillion.
However, this upward momentum also triggers increased selling pressure, as on-chain data reveals that many short-term investors may have started to enter the profit-taking phase.
Short-term investors begin to retreat
The HODL Waves index — a measure of the amount of tokens held over time — is showing that two key investor groups are rapidly reducing their holdings.
Specifically, on July 20, wallets holding XRP for about 3–6 months controlled about 12.07% of the supply. By August 11, this number had dropped to only 8.93%. Similarly, the group of wallets holding from 1–3 months also saw a decrease from 6.78% on August 1 to 5.83% at the time of writing.
Notably, the group holding for 1–3 months is the strongest buying force when the XRP price is around $2.77. Their continuous selling in recent times further reinforces the narrative of 'taking profits when in profit.'
The HODL Waves index is particularly significant as it directly reflects investor holding behavior over time. When the proportion of new holders continuously decreases, it often means they are realizing profits after a price surge. This could be a sign that short-term sentiment is changing — a turning point before the larger market trend shifts.
Exchange reserves indicate increasing selling pressure
When placing the declining HODL Waves data alongside the XRP reserves on exchanges, the market picture becomes clearer. Just in the past week, the amount of XRP reserves on exchanges has increased significantly. Historically, whenever reserves increase alongside a reduction in positions by short-term holders, the price often enters a correction phase.
This scenario had previously repeated on July 22, when reserves unexpectedly surged and the price of XRP quickly plummeted from about $3.55 to $3.17 in just one trading session. The reason is quite simple: tokens transferred to exchanges are more easily sold. When this coincides with a segment of holders reducing their portfolios, it is highly likely to be a sign of profit-taking activity.
The XRP price structure remains in an upward trend — temporarily
On the 4-hour chart, XRP continues to maintain a rising triangle pattern, with key technical levels being closely monitored by the market. The strong resistance is currently at $3.34; if it breaks through successfully, the price could quickly advance to $3.57, even challenging the historical peak of $3.66.
On the contrary, the $3.15 zone plays an important support role. Breaking through this level not only pulls the price back to $3.07 but also disrupts the short-term upward structure, opening up the risk of deeper corrections.
For traders, a short-term accumulation scenario before continuing to rise will be activated if the price closes above $3.34. Before that moment, the resonance between profit-taking pressure and increasing exchange reserves is a factor that makes the market need to be cautious.
In summary, the XRP chart still leans towards the bulls, but the actions of short-term investors along with exchange reserve data suggest that the upward momentum may stall before conquering new peaks. The two levels of $3.15 (support) and $3.34 (resistance) will be the 'hot spots' determining the next direction of the market.