Large holders are rapidly accumulating Ripple [XRP] as price slides toward the $1 psychological level.
Shark wallets, which hold 10K XRP tokens or above, have increased by over 16.81K over the last nine months, now at 343.5K. This growth is equivalent to 5.15%, indicating accumulation, but retailers are on the sidelines fearing the altcoin could dip below $1.
Over the past two months, XRP has lost about 30% in capitalization while whales and sharks continue to add more positions. This is a clear divergence showing that big investors are capitalizing on the fear to build discounted positions.
Despite this ongoing capital inflow, the altcoin continues to weaken as there is no cohesion among all XRP traders.
XRP’s leverage ratio hits a three-month low
Meanwhile, the Estimated Leverage Ratio (ELR) of the XRP Ledger on the Binance exchange has dropped sharply from 0.2086 to 0.1437.
This is the lowest level the metric has reached over the past three months when the value was 0.14. What followed next was a dip to $0.9925, where it rallied thereafter as ELR increased.
This decline in ELR implies that derivatives risk exposure is reducing as XRP trades around $1.05. That is, either through closure of positions or increased collateral deposits.
Amidst a significant drop in systemic leverage risk and a more stable derivatives market environment, forced liquidations often follow. However, they could mark potential inflection points in the market structure.
Can bulls defend the $1 level?
On the charts, the altcoin is approaching this inflection point as the price nears $1. In mid-August, XRP rallied from this level to a high of $1.699 in just four days.
Consequently, XRP plunged below the true close at $1.55, and its second attempt to stay above level failed. Over the past two months, the altcoin has been in a constant decline.
This is clearly evident with the daily trading volume of the altcoin being dominated by bears. At the time of press, the spot volume for XRP/USDT on Binance was at $17 million.
Moreover, the RSI Divergence printed a bearish signal, reinforcing the price weakness.
However, the Net Volume was slowly rising from the negative territory and briefly surpassed the neutral level, now at 2.10 million tokens.
Therefore, if the 10K wallets remain in this aggressive growth and Bitcoin [BTC] stabilizes, a hold above $1 may be viable. Thereafter, XRP would reclaim $1.10 or $1.15, but losing the $1 support would create a short-term sell-off.
Final Summary
- XRP’s shark wallets increased by over 16.81K as its price slid toward $1, indicating accumulation is building.
- XRP’s ELR dropped sharply, indicating deleveraging, but the altcoin was trading around $1, whose reaction would determine its next trajectory.