XRP Price: Dreaded $3 Fakeout Triggers Alarming Whale Sell-Off

The cryptocurrency market often presents sudden shifts. Currently, XRP price is signaling potential trouble. A recent rally to $3 proved short-lived, failing to sustain momentum. This “fakeout” has caught the attention of investors. Big investors, often called XRP whales, are actively selling their holdings. This action, coupled with reduced activity on the XRP Ledger, suggests a growing downside risk. Many analysts now predict a possible drop toward the $2 mark. This comprehensive XRP analysis explores the factors contributing to this bearish outlook.

XRP Price Action: Technical Warnings Emerge

XRP’s recent price movements show clear warning signs. The asset struggled to hold above $3. This failure suggests continued downside risk for the altcoin. Specifically, targets between $2.40 and $2.00 now seem more likely. Furthermore, technical patterns on the daily chart reinforce this bearish sentiment. Since reaching multi-year highs at $3.66, XRP price has formed a descending triangle pattern. This pattern features a flat support level combined with a downward-sloping resistance line. While a recent breakout above the upper trendline occurred, it quickly proved to be a fakeout. Bulls simply lacked the strength to maintain prices above $3. This indicates a significant lack of buying pressure.

Consequently, if XRP cannot reclaim the $3 level soon, where its 50-day Simple Moving Average (SMA) resides, the XRP/USDT pair could fall further. The immediate support level sits at $2.70. Below that, key levels to watch include the 200-day SMA at $2.50. Ultimately, the descending triangle pattern suggests a downside target around $2.06. This represents a potential 31% decline from current price levels. Therefore, traders must monitor these critical support zones closely.

Adding to the technical concerns, a bear flag pattern has also emerged on the same timeframe. This pattern warns of a potential decline to $2.40 after the loss of the $3 support. Conversely, reclaiming $3 could shift momentum. Buyers might then attempt to push XRP above the flag’s upper boundary at $3.20. Success here could lead to rallies toward $3.40 and eventually $3.66. However, current indicators strongly favor a bearish scenario. This detailed XRP analysis highlights the immediate challenges facing the cryptocurrency.

XRP Whales Initiate Significant Sell-Off

On-chain data provides crucial insights into the market’s current state. It reveals that large investors, or XRP whales, capitalized on the recent rally. They booked profits as the price briefly touched $3.10. The “Supply Distribution” metric clearly illustrates this trend. It shows a sharp reduction in XRP holdings by entities possessing 1-10 million tokens. These addresses now collectively own 6.79 billion XRP. This marks a six-week low for this cohort. Over the past two weeks, these whales have offloaded more than 160 million XRP tokens. This amount is valued at over $476 million at current prices. Such a substantial XRP sell-off by major holders underscores a bearish outlook. It suggests these large investors anticipate lower prices despite broader market optimism regarding impending spot ETF approvals and potential Fed rate cuts.

Moreover, data from Glassnode further supports this narrative. It shows a significant rise in XRP exchange reserves. The XRP balance on exchanges surged by 665 million tokens. It increased from 3.3 billion on August 27 to 3.94 billion on Monday. This substantial increase in exchange supply adds to the selling pressure. A larger supply on exchanges means more tokens are readily available for selling. This can easily exacerbate any downward price movement. Therefore, both whale activity and exchange reserves point to a significant XRP sell-off underway.

Declining XRP Network Activity Raises Concerns

Beyond price and whale movements, the health of the XRP Ledger itself shows signs of strain. The network has experienced a notable drop in activity over the last two months. On-chain data from CryptoQuant highlights this decline. Daily active addresses (DAAs) are now significantly below their peak. On July 18, DAAs reached 50,482. Currently, there are only about 21,000 daily active addresses. This sharp reduction signals decreased user transactions and engagement. It may also indicate reduced interest or a lack of confidence in XRP’s immediate future. This declining XRP network activity often precedes periods of price stagnation or further drops.

Similarly, the number of new addresses joining the network has also fallen. From a 2025 high of 11,000 daily, new addresses now stand at around 4,300. This drop suggests declining network adoption. Lower user engagement typically reduces liquidity and buying momentum. Historically, such declines in XRP network activity signal impending price stagnation or even further decreases. Reduced transaction volume directly impacts the overall health and perceived value of the network. This comprehensive XRP analysis therefore highlights a confluence of bearish signals, from technical patterns to on-chain metrics. Investors should exercise caution and conduct thorough research.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.