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YEREVAN (CoinChapter.com) — XRP price is down today, trading at just under $0.62 on Dec. 11 after falling 6.5% in the last 24 hours. Additionally, the token dropped below its 50-day exponential moving average (50-day EMA; orange wave) during the Asian-Pacific session but partially recovered above the wave afterward.
Additionally, the XRP price charted above a significant support line at $0.62. If the coin holds the support, it could consolidate at the line for the coming sessions. However, XRP could aim at the next available support at $0.60 if the decline continues, which is another 4% below the current value.
Meanwhile, the reasons behind the decline are noteworthy. So why is XRP down today? Let’s see.
Why is XRP Down Today? Blame the OI Drop
Today, the crypto market printed red candles following Bitcoin’s (BTC) lead. This drop was possibly due to long liquidations. In detail, investors who had bet on the price of cryptocurrencies going up (known as “long positions”) decided to sell off their investments.
The decrease in Open Interest (OI) backs the assumption. In short, the number of open contracts on the future price of cryptocurrencies dropped. The latter often means the leveraged bets are being closed out or ended.
As a crypto analyst noted in a Dec. 10 tweet, crypto prices dropped more on platforms like Bybit and Binance, known for leveraged bets, than platforms like Coinbase, where people usually buy and sell cryptocurrencies mostly through spot trading. The analyst also noted that the price correction is NOT a reversal. Moreover, some traders could view it as an opportunity to invest more, anticipating future gains.
However, XRP faced other issues in addition to the OI drop. With the $0.5 million inflows in the week ending Dec. 3, the XRP monthly inflows zeroed, suggesting low investor expectations as the focus shifted from altcoins to Bitcoin.
Additionally, several on-chain metrics supported the bearish price action.
XRP Price is Down Today Also Due to Bearish On-Chain Metrics
The development activity on the XRP Ledger dropped throughout December. Generally, high development activity on a blockchain could translate to investor trust and fund inflows. Conversely, low development activity could lead to lagging inflows and answer the question of why XRP is down today.
Additionally, the Network activity has not picked up since 7-day and 30-day active addresses dropped in mid-September.
The low active address count could also explain the overall arrested transaction volume on the Network since early December.
Number of XRP Whales A Bright Spot
The number of XRP whales has ballooned since early October. As a result, XRP addresses with a balance greater than $1 million and $10 million reached their yearly high despite the price correction.
Generally, a high whale count signals large investors’ high confidence in an asset’s returns. Also, since retailers tend to follow the whales, large investors could sway the market in their chosen direction. Thus, the charts above paint a positive outlook for the coin.
However, while XRP whales play an important role, they might not immediately boost the token’s price. The mentioned headwinds are why XRP is down today. If the headwinds persist, XRP could drop further, negating whale efforts.
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