XRP has surged nearly 30% in recent weeks, currently trading at $2.58, but technical indicators suggest growing risks of a price correction. The rally faces headwinds as on-chain metrics show long-term holders may be preparing to take profits.
The Dormancy Flow metric, which tracks the movement of long-held coins, has risen to 1.19. This elevation typically signals that veteran investors are transferring assets, historically preceding market pullbacks when coins dormant for extended periods suddenly become active.
Further supporting the correction outlook, XRP’s Relative Strength Index (RSI) stands at 72.95 – significantly above the 70 threshold that indicates overbought conditions. Meanwhile, the Net Unrealized Profit/Loss (NUPL) metric continues climbing at 0.56, reflecting mounting unrealized profits across the network that could trigger selling pressure.
Market analysts warn that waning demand could push XRP into a downward trajectory. However, sustained buying momentum might still propel the cryptocurrency toward the $2.65 resistance level before any significant retracement occurs.