Ripple [XRP] was trading just above the $1 level. It was down 2% in 24 hours, following Bitcoin’s slip below the $63k level in recent hours. July 30 saw strong spot STF inflows of nearly $6 million for XRP, signaling some investor conviction.
Total net assets were at $1 billion, but the price action was dominated by sellers.
Onchain, a consolidation phase and reduced leverage could lead to healthier market conditions in the future. Here’s how.
Clues from whale accumulation and falling XRP inflows
Data showed that XRP withdrawal transactions from exchanges reached their highest since February 2021. Their strongest dominance in five years was accompanied by XRP deposits falling to their lowest since 2021, too.
This shift accelerated towards the end of July, signaling potentially increased accumulation.
It must be clarified that the metric deals with transaction counts, not transfer volume. Hence, it does not prove sizeable capital flow away from exchanges.
At the same time, the withdrawal transactions reached multi-year highs, while XRP exchange inflows reached their lowest level ever. Crypto analyst Darkfost observed that the average monthly XRP inflows to the platform now stand at around 3.6 million XRP.
This number might seem large, but it’s the lowest monthly inflow figure on record. Combined with the heightened withdrawals, the onchain metrics pointed toward holders unwilling to sell XRP in large numbers.
Seller exhaustion and consolidation phase ahead
The analyst concluded that the low inflows represented seller exhaustion. It could help XRP build a base above $1 and consolidate. It remains to be seen if strong demand will arrive soon to drive price trends higher.
The estimated leverage ratio [ELR] tracks the ratio of Open Interest to exchange reserves of the asset. The exchange reserves were at the lowest since February, and OI has been declining since May.
The falling ELR underlined deleveraging in the market. A reduced systematic risk from leverage can give XRP more room to consolidate and offer a more stable derivatives market, less prone to liquidity hunts and price volatility.
These conditions could lead to a prolonged consolidation phase that long-term investors could investigate as a buying opportunity.
Final Summary
- The XRP news was positive, with increased withdrawals, falling exchange inflows, and an uptick in spot ETF inflows compared to earlier this week.
- The price was holding above the psychological $1 support level, and falling ELR made the argument that the consolidation phase would continue.
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