XRP reached a new all-time high (ATH) in July, showing an impressive upward trend. Although the price slightly dropped from its peak, XRP is still close to its ATH of $3.66.
Historically, XRP has faced challenges in August, but this time, positive market signals are visible.
XRP Investors Are Active
Recent XRP market activity shows a dramatic change in investor sentiment. Over two and a half weeks, approximately 946 million XRP, worth $2.86 billion, was sold on exchanges. This represents significant profit-taking and pushed supply to its highest level in eight months. However, Alexis Sirkia, captain of Yellow Network, told BeInCrypto that this sale was temporary.
"Such sales after an ATH are still common in a market building trust. Especially at this ATH, most retail and institutional investors took the opportunity to reduce risk. But I believe this pressure is temporary. This time, XRP's rise is not driven by speculation but supported by actual compliance, cross-border finance, and infrastructure development." โ Alexis Sirkia, Captain of Yellow Network
A week later, investors bought back over 400 million XRP worth $1.2 billion. This quick reinvestment emphasizes strong confidence in XRP's future performance and indicates that market sentiment is turning optimistic again.
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XRP's macro momentum is particularly supported by positive technical indicators like NVT (Network Value to Transactions ratio). This ratio is currently at its lowest in five months, indicating that network value has not exceeded trading activity. This is crucial for XRP, as it suggests the cryptocurrency is not overheated.
Without the pressure of an inflated network value, XRP is better positioned to experience stable growth without the risk of significant correction. This especially sets the stage for potential recovery and upward movement, considering the healthy trading activity on the XRP Ledger.
Will XRP Price Rebound?
Currently, XRP is trading at $2.99, having passed the key support level of $3.00. The altcoin is still over 22% down from its ATH of $3.66, but the foundation for potential growth remains strong. Historical data suggests August typically brings a weak momentum for XRP, with a monthly median return of -6%.
However, considering the recently observed strong buying activity and positive technical indicators, this August might deviate from the typical trend. If XRP can secure support above $3.41, the altcoin could move towards its ATH again. Sirkia discussed XRP's future with BeInCrypto.
"Long-standing market institutions are gaining momentum. We are also in a macro environment where funds are rotating risk. XRP is establishing its position through regulation and infrastructure, which will be sustainable long-term. Short-term flows are temporary, but the foundations laid today will define the next cycle."
However, there is also a risk of decline. If XRP fails to recover the $3.00 support, the price could drop to $2.65, which could invalidate the bullish logic. A drop to this level would mark a four-week low and likely trigger additional selling pressure.
