Ripple's XRP has faced a downward trajectory, losing nearly 10% in the last two weeks.
The token's decline since August 14 has now caused a split in investor behavior, as on-chain data points to divergent strategies among different groups of investors. What does this mean for XRP investors?
Buyers on the Dip May Outweigh Long-Term Investor Distribution?
Short and medium-term investors seem to see the pullback as an opportunity to accumulate. On-chain analysis indicates that these new market participants have increased their supply during the decline over the past two weeks, betting on a short-term recovery.
According to data from Glassnode, the HODL Waves of XRP, a metric that tracks how long coins are held, reveal that two groups of investors are becoming increasingly active.
Those who held their tokens for one to three months (short-term investors) currently control 9.51% of the circulating supply of the token. This group has collectively increased their holdings by 8% since August 14, reflecting their conviction in a potential recovery.
Medium-term investors have also joined the 'buying the dip' strategy. According to Glassnode, the group holding for 6 to 12 months now controls 23.19% of the circulating supply of XRP, its largest share of the year. This demonstrates renewed accumulation as XPR trades down.
XPR HODL Waves. Source: Glassnode
However, the optimism of these buyers contrasts with the behavior of long-term investors (LTHs). This is illustrated by the Liveliness of XRP, which has been steadily rising since August 19.
The Liveliness of an asset tracks the movement of its long-held/dormant tokens. It does this by measuring the ratio of coin days destroyed to total coin days accumulated. When the metric rises, it means that LTHs are moving or selling their coins.
When it falls, LTHs are moving their assets off exchanges, a move seen as a bullish accumulation signal.
XPR Liveliness. Source: Glassnode
On the other hand, when it rises, LTHs are moving or selling their coins, a trend that is now putting additional selling pressure on XRP.
XRP struggles to find direction
The divergence in the behaviors of these groups of investors shows the uncertainty surrounding XRP's short-term trajectory. Its recovery depends on whether the new demand from recent buyers can outweigh the selling pressure from experienced investors.
In this case, it could recover, regain the $3 mark, and rise to $3.22.
XRP Price Analysis. Source: TradingView
However, if sales intensify, the price of XRP may prolong its decline and drop to $2.63.
The article XRP Analysis: Selling Pressure Threatens the Coin was first seen on BeInCrypto Brazil.
