XRP started rebounding from early June and is attempting to recover losses from May. At the current time of reporting, this token is trading at $2.19.
However, this upward trend could be at risk as long-term holders are taking this rally as an opportunity to realize profits.
XRP Short-Term Rally Risk... Dormant Wallet Reactivation
Along with XRP's price, its activity has increased since the beginning of June. This suggests that long-term holders are viewing the recent price rebound as an opportunity to sell their assets. According to glassnode, this indicator closed at 0.809 on June 3rd.
Liveliness tracks the movement of previously inactive tokens. It is measured by the ratio of coin days destroyed to total accumulated coin days. When this indicator drops, it suggests long-term holders are moving assets from exchanges, which is often interpreted as a buy signal.
Conversely, when an asset's liveliness increases, it indicates more inactive coins are being moved or sold, meaning long-term holders are increasing profit-taking.
In the case of XRP, the liveliness indicator confirms that long-term holders are currently transferring or selling their holdings, which increases the possibility of a short-term correction.
Particularly, these changes are largely attributed to the recent increase in the proportion of XRP supply in profit, which is encouraging some holders to realize gains when the market is favorable.
According to glassnode, after hitting a multi-month low of 79% on May 31st, this indicator has sharply risen, with 82% of XRP holders currently showing unrealized gains.
As XRP rises and more traders are in profit, the incentive to sell increases, which could trigger a selling wave that puts downward pressure on the token's price and potentially halt the recent rally.
Profit-Taking, Will It Stop the Rally... Or Provide a Breakthrough?
The increased token circulation among long-term holders generally signals increased selling pressure, which could weaken XRP's short-term rally.
If the current profit-taking trend continues, the altcoin's price could significantly drop, falling below $2 and trading at $1.99.
However, if buying pressure strengthens, it could maintain the price rally and push XRP beyond $2.29.
