$XRP recently corrected sharply amid a broader market crash, but here’s why this collapse was always on the cards.

For context, the latest correction came after XRP claimed a new peak of $3.66 on July 18. It immediately gave up this level as August opened and continued to battle the bears above $3 until the recent drop made it lose the psychological mark. Specifically, XRP collapsed 6.62% yesterday, its largest daily loss in a month.

✨Profit-Taking Trend Among XRP Holders

However, before this drop, The Crypto Basic called attention to a market trend that actually pointed to a massive decline. Specifically, while XRP changed hands above $3, the report revealed that about 94% of XRP wallets were in profit.

Nonetheless, the report noted that while this is an impressive metric in terms of profitability, it might point to a massive price crash in the short term, as most of the wallets that are now seeing gains could start executing profit-taking trades. This often leads to price declines.

Notably, historical data confirmed this pattern. For context, in January 2018, when XRP spiked to a new all-time high of $3.3, address profitability surpassed 90%. After this, XRP witnessed a steep drop, crashing by a massive 43.57% in January 2018 alone, and extended the downtrend to a 95.5% drop by the end of the correction.

This trend played out again after XRP recovered to the $1.96 high during the 2020/2021 bull run. Upon reaching this peak, XRP’s address profitability soared past 90% again. Expectedly, this led to another round of profit-taking trades, with XRP eventually collapsing by 85%.

✨XRP Showing Greater Resilience Now

Considering this trend, market analyst Winny argued that with XRP’s wallet profitability rising above 90% again, “someone” would eventually sell. This has since materialized, but not in full force. For context, an 85% collapse for XRP would lead to $0.45, and a 95% drop would result in a price of $0.15.

Notably, Winny suggested that this time might be different due to rapidly growing whale wallets, a spike in network activity, and positive chart patterns. While the profit-taking trades as well as the broader market downturn have pushed XRP below $3, it still holds firm at $2.9, now attempting to recover the psychological threshold.

Despite it trading at $2.9 at press time, XRP’s daily RSI still stands at a low 43.05. Notably, when XRP traded for $2.9 in mid-July, its RSI was already overstretched at 83.69. However, it still saw a run to $3.66 days later. With the current 43.05 RSI value, XRP has much more room for growth. As a result, a recovery here could push prices to new highs.

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