Blockchain analysis
Almost everyone is making money and wants to cash out:
According to reports, over 90% of people currently holding XRP are making a profit! Especially when the price surged to $3.6 recently, the proportion of profit-making individuals reached over 93%.
My view is: this is actually quite a dangerous signal. Think about it, if almost everyone holding the coins is making money, then certainly there will be a large number of people thinking 'take the profit and run', hastily selling to secure their profits.
Historical experience also tells us that when over 90% of people are in profit, it often indicates that the price is nearing its peak, making it prone to decline. Now that so many people want to sell, the price is naturally being driven down.
The big shots' actions are too drastic and have scared the market:
Here's a specific example: Ripple's co-founder Chris Larsen has recently made significant moves. He transferred nearly $175 million worth of XRP around, with $140 million going to exchanges alone!
His operation started on July 17, coincidentally, that day the XRP price was still above $3.6, and then it began to drop by 10%-14%.
My opinion is: when a founder-level big shot suddenly transfers so many coins to exchanges, the market will certainly think he is going to sell and cash out! This action itself acts like a 'sell signal', directly undermining the confidence of many ordinary investors.
When everyone sees that the big shots have run away, they also panic sell, exacerbating the decline.
Panic spreads, and new buyers can't sit still:
This drop has made it particularly difficult for new buyers who only bought XRP around $2.3 to $2.8.
I think: they might have come in chasing the price, and when they see the price drop below their cost, or their profits shrinking significantly, they easily panic. Fearing more losses or losing all their profits, they hastily sell, either trying to preserve that little profit or wanting to cut losses.
This collective panic selling adds fuel to the decline.
The price has somewhat 'over-inflated', and now it needs to 'return to reality':
The report mentions a term called 'return to short-term realized price levels'. Simply put: the price surged too quickly and aggressively a while ago.
It has somewhat deviated from short-term support. The current drop is, to some extent, the price looking for a more realistic support level to allow the market to calm down.
To summarize my viewpoint:
The recent drop in XRP is not without reason.
The core issue is that those who made money, especially those who bought in early at low prices, want to cash out and start selling.
Just at this moment, Ripple's big shots made a big move, transferring a large amount of XRP to exchanges, making everyone feel that 'even the founders are running away', causing confidence to collapse.
When confidence collapses, combined with a price drop, those who just bought at a high price become anxious and also panic sell. A combination of forces brings the price down.
Historical patterns and current market behaviors confirm this. The current price is squeezing out some of the previous 'bubbles', moving closer to a more realistic range.
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