- XRP’s +20% upswing reversed August losses.
- Short and long-term holders were in profit and could be tempted to take profits.
Ripple Labs’ win against SEC’s $2 billion claim saw its native token, XRP, rally over 20% on 7th August. The update meant the long-running lawsuit could be over soon, boosting the altcoin’s market sentiment.
XRP reverses August losses
The update and +20% upswing effectively reversed XRP’s August losses. As of press time, the altcoin was back to its late July value of $0.6. Additionally, the rally tipped XRP to outperform Bitcoin [BTC] as the XRPBTC ratio jumped by over 20% on 7th August.
Meanwhile, the $0.6 price level was also a supply zone and daily bearish order block (OB), marked red.
That meant sellers could be tempted to short the altcoin at this resistance unless the bullish momentum extends.
Source: XRP/USDT, TradingView
However, a convincingly flip of the supply area (red) into support could extend the bulls’ party to the $0.7 or $0.75 targets. That’s a potential extra gain of 12% and 20%, respectively.
On the other hand, XRP could retrace to the $0.54 if the supply area attracts more profit takers and drags it lower. Given that some of the largest XRP whales were dumping their holdings, the trend reversal was near $0.6 and couldn’t be overruled.
Per Santiment data, those holding 100M—1B XRP tokens, that’s around $60M—$600M, were dumping their holdings. This cohort was also joined by those holding between 100K – 1M XRP tokens.
Source: Santiment
At the same time, cohorts holding between 10M and 100M accumulated, suggesting that the whale actions could cancel each other if the overall market sentiment doesn’t worsen further.
Holders in profit?
Interestingly, the SEC win also saw short and long-term holders enjoy the windfall differently. For instance, XRP holders who bought the altcoin a month earlier saw their portfolio jump by 6.8%.
On the contrary, those who held for over 3 months enjoyed 13.75% profit, as shown by the 90-day MVRV (Market Value to Realized Value) ratio.
Source: Santiment
On the one hand, the rising MVRV indicated that altcoin was becoming increasingly overvalued and expensive compared to the acquisition cost of most holders.
This could signal a likely trend reversal, especially amidst increasing unrealized profits, which could tip holders to take some profit.
In short, the supply area at $0.6 was a key level to watch if the extended upswing was likely in the short term.
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