XRP whales significantly reduced their holdings amid a major market downturn this week.
Today, XRP has rebounded after the notable Tuesday sell-off, showing a 3.7% increase in the past 24 hours. At press time, XRP is trading at $2.30, a minor turnaround from lows at $2.08.
Despite this short-term recovery, XRP remains down 9.5% over the past week and 19.4% over the past 30 days.
XRP Whales Reduce Holdings
Meanwhile, amid the XRP price decline, market data indicates a sharp reduction in XRP whale holdings. In a tweet, Ali Martinez highlighted that wallets holding between 10 million and 100 million XRP have decreased their portfolio.
The decline started around February 21, when their holdings were at approximately 6.94 billion XRP. By February 25, this figure had dropped to nearly 6.56 billion XRP. Notably, this reflects a reduction of more than 370 million XRP or $851 million within 96 hours, signaling sustained selling pressure among large investors.
Market Sentiment Turns Bearish
Notably, the sentiment across the crypto market remains bearish, with XRP experiencing heightened fear, uncertainty, and doubt (FUD). A separate analysis from Santiment highlights extreme negativity in trader sentiment, paralleling Bitcoin’s decline to $86,000.
XRP, alongside Bitcoin, Ethereum, and Solana, has seen social commentary largely dominated by pessimism. Historically, such levels of bearish sentiment have coincided with market bottoms, prompting speculation on whether a reversal is imminent.
Potential Oversold Conditions For XRP
Elsewhere, XRP’s open interest-weighted funding rate, a vital market sentiment indicator, turned negative. Throughout January and most of February, the funding rate remained positive. However, most recent data shows a shift, with red bars signaling bearish sentiment.
Historically, negative funding rates have often preceded price reversals, as excessive shorting can lead to a short squeeze when buying pressure intensifies. Previous occurrences of this trend have seen XRP prices recover shortly after the funding rate turned negative.
The market’s current conditions suggest that a potential reversal could follow if short positions become overly crowded.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
