The price of XRP saw a remarkable recovery, rising above the $2 level amid a boost in momentum in the broader cryptocurrency market. This transition was supported by an improvement in risk sentiment; however, the rise of XRP is not solely limited to market conditions.
The ability of the alternative currency to recover $2 also allowed XRP to temporarily change the value of BNB in market capitalization rankings. This development represents a return of investor interest after weeks of consolidation.
However, maintaining this position relies on continued structural support rather than short-term speculative flows.
XRP holders are showing strength
The data on the chain shows that over 500 million XRP have recently been moved to a collateral mechanism designed to lock the supply until 2028. This action removes over a billion dollars worth of XRP from circulation. This decrease in supply changes market conditions by limiting available liquidity during periods of increased demand.
Supply locks based on the fund tend to have a stronger price effect when demand remains stable. XRP benefits from continued institutional and corporate interest.
With fewer tokens available for trading, even slight increases in demand can lead to exaggerated price reactions, creating conditions for a potential supply shock.
Want more insights like this? Subscribe to the daily crypto newsletter by editor Harsh Notaria here.
Overall momentum indicators further bolster the bullish narrative. The net position change indicator in favor of HODL shows that long-term holders are returning to accumulation. Over the past week, wallets classified as LTH have consistently increased their XRP balances.
This accumulation represents a clear reversal after nearly a month of continuous selling pressure. Long-term holders typically reduce exposure during uncertain conditions and re-enter when confidence returns. Their renewed buying indicates faith in XRP's continued rise rather than a short-term price spike.
Activities from older wallets often provide structural support during rallies. These holders tend to sell less aggressively during pullbacks, reducing downside volatility.
As LTH accumulation increases, price stability improves, allowing XRP to build higher support levels while reducing the risk of sharp corrections.
The price of XRP rose by 6.7% over the last 24 hours, trading near $2.00 at the time of this report. While regaining this level is a psychological marker, confirmation remains crucial. XRP must secure $2.00 as support to maintain bullish momentum and avoid a false breakout.
Immediate resistance stands at $2.03. A decisive movement above this level, followed by consolidation, would confirm a bullish continuation pattern.
If this occurs, XRP could extend gains towards $2.10, where additional liquidity and historical resistance exist.
However, the risk of a downturn still exists. New holders who have waited nearly three weeks for favorable exit conditions may start taking profits.
If selling pressure intensifies, XRP may return to $1.93. Losing this support could expose the price to $1.86, nullifying the bullish hypothesis and reverting the outlook to neutral.