XRP Faces Downturn: Is a Major Rally Coming for Long-Term Investors?

Sean Williams
XRP

Coin cryptocurrency ripple on night city background and chart. XRP

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  • XRP has seen a 23% decline in recent weeks, but ETF inflows signal institutional interest.
  • Large XRP holders are accumulating, suggesting long-term growth despite short-term volatility.
  • Historical trends indicate that extended price stagnation often precedes explosive growth for XRP.

XRP has been under significant downward pressure in recent weeks, despite sporadic recoveries in the broader cryptocurrency market. Over the past seven weeks, XRP has closed in the red for six of those weeks, with only a modest 10% gain during the week of October 20. This decline comes even as the introduction of multiple XRP exchange-traded funds (ETFs) has attracted nearly $586 million in inflows. While this institutional interest could signal positive future potential, XRP has struggled to maintain upward momentum, and some analysts see a deeper pattern emerging.

A Period of Stagnation and a Changing Market Sentiment

The current market weakness, which has seen XRP decline by more than 23% during a seven-week period, has led some traders to question the token’s future. Despite the optimism around new ETFs, XRP’s performance remains lackluster. Some analysts, however, believe that this period of stagnation mirrors previous cycles where XRP experienced long periods of consolidation before a sharp upward move.

MichaelXBT, a well-known market commentator, suggests that the downturn is indicative of a value reallocation between short-term holders and long-term investors. According to him, the ongoing retracement is similar to what occurred in 2024, when XRP’s value was relatively stagnant around the $0.58 mark. During that phase, XRP underwent a lengthy consolidation, setting the stage for a massive rally that saw the asset surge by over 600% in just a few months.

Accumulation by Large Holders Signals Optimism

While many retail investors appear to be selling their XRP holdings due to waning market confidence, data from blockchain analytics firm Glassnode suggests that large holders are taking a different approach. In fact, major XRP holders have accumulated approximately $7.7 billion worth of the token since August. This trend points to a divergence in strategy, with institutional investors taking a long-term approach, while short-term traders look for immediate gains.

The increasing accumulation by larger holders underscores the belief that the current market correction is part of a redistribution phase. MichaelXBT interprets this as a sign that XRP could be positioning itself for another upward movement once the consolidation phase ends. This type of price behavior has been observed in previous cycles, where extended periods of price weakness eventually led to explosive growth.

Also Read: XRP Price Prediction 2025–2030: Is a $26.50 Breakout Coming Before It’s Too Late?

Will XRP Break Out Again?

Although short-term sentiment remains negative, the underlying market structure suggests that XRP’s current correction could ultimately lead to another major breakout. MichaelXBT’s earlier analysis predicted a parabolic surge in XRP’s price once consolidation concluded, and his recent comments seem to echo that forecast. As larger investors continue to accumulate XRP, the potential for a sharp upward move remains, even if it may take time for the broader market to catch up.

XRP’s current market correction may seem discouraging, but it is likely part of a larger pattern of consolidation that precedes significant price movements. As larger investors accumulate more XRP, the stage could be set for another explosive rally, similar to the one witnessed in 2024. For long-term investors, the message is clear: patience may be key, and those willing to wait for the market to stabilize could reap substantial rewards once the consolidation phase ends.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.

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