XRP has been on a steady decline over the past month, with its price weakness pushing the number of addresses in profit to its lowest count this year on March 31. 

This downturn reflects increased selling pressure as the bearish sentiment continues to dominate the market.

Amid XRP’s falling prices, the total number of wallet addresses holding the token in profit plunged to a year-to-date low of 5.24 million on March 31. This drop reflects the sustained bearish pressure on the altcoin as more holders find themselves in a losing position due to the token’s prolonged price downturn.

For context, since it climbed to an all-time high of 6.04 million addresses on March 2, the number of XRP addresses in profit has trended downward. 

This decline could increase the downward pressure on the token’s price because as profitability falls, more holders may choose to sell to cut losses, further fueling the bearish momentum. If this trend continues, XRP risks extending its price decline.

Further, the token’s steady negative funding rate confirms this bearish outlook. At press time, it stands at -0.007%, signaling the preference for short positions among derivatives traders. 

The funding rate is a periodic fee exchanged between long and short traders in perpetual futures contracts to keep prices aligned with the spot market. When an asset’s funding rate is negative, short positions pay long positions, indicating that selling pressure is higher and traders are predominantly bearish on the asset.

This trend signals a lack of confidence in a near-term recovery, leaving XRP vulnerable to further losses.

At press time, XRP exchanges hands at $2.11, trading above the key support floor formed at $2.03. If selling pressure strengthens and XRP breaches this support level, its downtrend would gain momentum, and its price could fall below $2 toward $1.77. 

On the other hand, if XRP sees a spike in new demand, this bearish outlook will be invalidated. In that scenario, the token’s price could rally toward $2.27.

The post XRP Faces Key Test at $2 as Addresses in Profit Plunge to Year-To-Date Low appeared first on BeInCrypto.

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