Ripple [XRP] witnessed a surge in whale activity last week, with whales holding assets exceeding $5 million now in control of 55% of the token supply. This high concentration of ownership by whales could result in volatile price fluctuations, as evidenced by the sharp movement observed on the 10th of July 2023.
Over recent months, XRP has been struggling to break above the $0.7 range high that has been established since August 2023, indicating a phase of consolidation. On-chain data indicates a potential rise in short-term selling pressure on XRP.
Notable Increase in Dormant Circulation Activity
On September 2nd, there was a significant spike in dormant circulation activity, suggesting a substantial uptick in engagement among XRP addresses. This surge in activity surpassed levels seen in June 2023.
Historically, a surge in this metric often precedes a significant price correction, which was indeed the case as XRP witnessed a 12.18% drop in value from $0.572 to $0.502 within the following four days.
While development activity continued for XRP, its valuation remained comparatively lower than that of leading large-cap cryptocurrencies like Cardano [ADA]. Additionally, the number of daily active addresses has remained relatively steady over the past six weeks.
Evaluating Potential Capital Inflows into the Network
The estimated leverage ratio experienced an uptick in mid-July alongside prices, but has since stabilized. This lack of significant movement in the last month suggests that speculators have been hesitant to enter leveraged positions.
This observation reinforces the notion that XRP is currently in a phase of consolidation.
In September, the mean coin age declined, aligning with the trend observed in dormant circulation. While the pace of distribution has slowed over the past two weeks, the mean coin age has shown signs of a potential uptrend.
Of particular note is the rapid decrease in the mean dollar invested age (MDIA). A downward trend in MDIA typically indicates that investments are becoming more active, suggesting a potential uptick in network activity and signaling the possibility of price appreciation on the horizon.