XRP, one of the top cryptocurrencies, is currently facing increasing selling pressure, raising concerns over a potential price drop. After experiencing significant gains in recent days, XRP’s upward momentum seems to be waning as a growing number of new market entrants begin selling their holdings. As of today, XRP’s price has dropped by 5.26% within the past 24 hours, signaling a shift toward bearish sentiment.

Surge in Active Addresses Raises Concerns

One of the key indicators contributing to this shift is the dramatic rise in the number of active XRP addresses. Recent data from blockchain analytics firm Glassnode reveals that the number of active XRP addresses surged by an astonishing 620% in the last few weeks, climbing from 74,589 to 452,650. Typically, a surge in active addresses is seen as a positive sign, indicating increased demand, which usually leads to higher prices.

However, this surge in active addresses seems to have peaked on March 2, after which the number began to decline, signaling a slowdown in trading activity. The decrease in active addresses suggests that many of the recent market entrants may have sold their XRP holdings, likely capitalizing on recent price gains. This shift in market behavior is fueling a bearish sentiment, which could indicate that the price may decline further.

Derivatives Market Signals Bearish Sentiment

The decline in active addresses is mirrored in the derivatives market, where key metrics are starting to show signs of bearish activity. A crucial indicator, the Open Interest Weighted Funding Rate, is an essential measure of market sentiment, as it adjusts funding costs based on open interest in derivative contracts. When the funding rate is negative, it suggests that selling pressure is dominating the market.

As of the latest data, the OI-Weighted Funding Rate has fallen to -0.0022%, a sharp decline from the positive rate of 0.0103% seen on March 3 when buying activity was high. This negative rate points to an increase in selling activity, which is further confirmed by a ratio drop below the critical 1.0 threshold, reaching 0.9798. If the ratio continues to fall, it could signal further downside for XRP.

Spot Market Shows More Selling Than Buying

Spot market activity is also reflecting the growing selling pressure on XRP. Data from Coinglass shows that retail investors in the U.S. are driving a major sell-off across top exchanges. Coinbase and Kraken have collectively sold $34.68 million worth of XRP, while Binance and Bybit, in contrast, have purchased only $34.45 million. This has led to a net outflow of $230,000 in XRP, as more tokens are being sold than bought in the spot market.

This shift in market activity further suggests that XRP is under increasing downward pressure. If the trend continues, XRP could potentially erase the modest gains it’s made in the past month, sending it back into the red.

What’s Next for XRP?

The combination of declining active addresses, increasing selling pressure in the derivatives market, and strong sell-offs in the spot market all point to a bearish outlook for XRP in the short term. However, if these selling trends reverse and new buyers enter the market, there could still be a potential for a rebound. For now, though, the outlook remains uncertain, and investors will need to closely monitor these key metrics in the coming days to gauge XRP’s future price trajectory.