XRP unexpectedly lost 6% in Tuesday's trading session, as large investors collectively reduced their positions to take profits at high levels. Notably, this move occurred just hours before a crucial speech by Federal Reserve Chairman Jerome Powell at the Jackson Hole conference.
XRP whales sell 460 million tokens, awaiting signals from Powell.
XRP continued its decline on Wednesday, losing another 6% as investors showed caution ahead of Fed Chairman Jerome Powell's speech on Friday. In just 6 days, this cryptocurrency has evaporated a total of 13%.
Notably, the group of wallets holding between 10 to 100 million XRP has net sold about 460 million tokens in just one week. In contrast, 'small whales' holding between 1 to 10 million XRP have taken the opportunity to accumulate an additional 130 million tokens. This development reflects a divide in the expectations of large investors. History has shown that XRP prices often follow the footsteps of key 'whales'.
Despite this, most investors are still in a 'sitting on profits' state. Over 93% of the circulating XRP is currently profitable compared to the purchase price since mid-July, with an average return on investment consistently above 90%. In fact, since the strong breakout last November – following President Trump's election victory – the return on investment for XRP investors has never dropped below 80%.
Part of the bullish momentum also comes from Ripple officially closing its more than 4-year-long legal battle with the U.S. Securities and Exchange Commission (SEC), along with positive legal backing from the Trump administration.
However, as favorable legal factors have been reflected in prices and investor profits have remained high for too long, the market risks witnessing a strong profit-taking wave if a price shock occurs. At this point, all eyes are on Powell's speech at Jackson Hole, an event that could become the catalyst determining how the 'currently profitable' group of investors acts in the upcoming sessions.
XRP has lost the 50-day SMA, heading towards the $2.78 support area.
In the past 24 hours, XRP has continuously breached several important support levels, including the lower edge of the symmetrical triangle pattern, the $2.95 threshold, and the 50-day simple moving average (SMA).
If it cannot quickly regain the 50 SMA, this coin may slide back to the support area near $2.78. In a more negative scenario, the $2.6 level is seen as the 'last cushion' to limit the decline.
Technical indicators are currently also leaning towards a bearish trend. The relative strength index (RSI) has fallen below neutral territory, indicating that bears are gaining the upper hand. Meanwhile, the Stochastic Oscillator has entered the oversold zone, reflecting strong bearish pressure still in play, but at the same time opening up the possibility of a technical rebound in the short term.