Ripple traders realize over $75 million losses in July, is XRP sell-off coming?

• Ripple traders took over $75 million in losses in July, per Santiment data. 
• Ripple’s whales have distributed XRP at a loss in the past thirty days while retail investors accumulate the altcoin.
• Ripple’s MVRV has dipped into the opportunity zone, where XRP price typically recovers. 
• XRP dipped under key support at $0.4508, Ripple’s June 7 low.  

Ripple (XRP) price is under fresh selling pressure and tests key support at the June 7 low of $0.4508 on Thursday as whales are likely capitulating, according to on-chain data. Large wallet holders of XRP have distributed their holdings at a loss while small investors and retail traders accumulate.

The US Securities and Exchange Commission (SEC) vs. Ripple lawsuit has a new development. The payment remittance firm filed a letter of supplemental authority on Tuesday after Judge Amy Berman Jackson’s ruling in the Binance lawsuit cited Judge Analisa Torres’ ruling on XRP not meeting Howey’s requirements in secondary market sales. The SEC responded to the letter on Wednesday.

XRP price dipped under key support to a minimum of $0.4450 on Thursday. At the time of writing, XRP/USDT trades at $0.4570, losing more than 2% daily. 

Daily Digest Market Movers: New development in SEC lawsuit, whales exit positions

• Ripple proponent attorney James Filan shared the letter of supplemental authority that Ripple filed in the lawsuit on Tuesday. The SEC responded to the letter on Wednesday. 
• In its letter, Ripple refers to the recent decision in the SEC vs. Binance lawsuit and argues that the secondary market sales of the asset were not securities violations. Ripple, therefore, “does not reflect disregard for the law or warrant harsh remedies,” as requested by the SEC. 

• The SEC responded to Ripple’s letter and argued that Ripple is extrapolating on one observation from a 90-page ruling. The SEC mentions its 2017 notice to the crypto industry that predates the sales of XRP tokens by the payment remittance firm. 

• On-chain data shows that Ripple whales are consistently shedding their XRP holdings, distributing them as small wallet holders accumulate the recent price dip. Traders have realized over $75 million in losses in July. 
• The Santiment supply distribution chart shows the change in holdings:

XRP supply distribution 

• Another key metric is the Network Realized Profit/Loss (NPL), which measures all traders’ net profit/loss on a given day. The NPL metric shows negative spikes, meaning XRP holders have taken losses when distributing their holdings, typical of capitulation. 
• Market Value to Realized Value (MVRV) metric is useful for identifying local tops and bottoms and upcoming reversals in an asset’s price. XRP’s 30-day MVRV has dipped to negative 4.42% on Thursday. According to this metric, XRP is currently undervalued and in the opportunity zone. 
• On previous occasions when XRP’s MVRV touched this level, the asset’s price trend reversed, so the altcoin is likely primed for recovery. 

XRP NPL and MVRV (30-days)

Technical analysis: XRP tests key support, sell-off could push prices lower

Ripple’s prices tests key support at $0.4508, the June 7 low. The altcoin has been in a state of decline since March 11. In the recent market sell-off, while Ripple whales shed their holdings, retail traders accumulated. XRP has therefore likely resisted a mass sell-off. 

A sell-off could increase the pressure on XRP and push the altcoin to the April 13 low of $0.4188. 

On the other hand, if XRP recovers from the recent decline, it could make a comeback above the Fair Value Gap (FVG) between $0.5008 and $0.5164.

XRP/USDT daily chart 

A daily candlestick close above $0.4955, the 23.6% Fibonacci retracement of the decline between the March 11 top of $0.7440 and the April 13 bottom of $0.4188, could invalidate the bearish thesis for XRP.