Dormant XRP Coins Flood the Market — Here’s What It Means for Price

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As the second quarter came to a close, XRP investors were met with a concerning on-chain signal: a sudden surge in the movement of long-dormant tokens. This shift has sparked speculation about whether large holders are preparing for a market downturn as we enter Q3.

The abrupt activation of coins that had remained untouched for months often points to one primary behavior—distribution. When long-term holders (LTHs) begin moving their assets, it typically indicates profit-taking or risk mitigation. The real question now is whether this activity foreshadows further price declines in the near term.

What Does Rising Dormant Circulation Mean for XRP?

On-chain analytics from Santiment reveal that XRP’s Dormant Circulation (90 days) spiked to 387.19 million tokens on Monday—the highest level in three weeks. This metric tracks the volume of XRP that had not moved for at least 90 days but suddenly became active within a 24-hour window.

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Such spikes are historically associated with long-term holders liquidating positions. Whether they’re locking in profits after a rally or exiting due to anticipated weakness, increased dormant circulation often precedes bearish pressure.

This isn’t just speculative—it’s backed by behavioral patterns observed across previous market cycles. When whales and seasoned investors start moving their holdings, retail traders would do well to pay attention.

Liveliness Index Reversal Adds to Bearish Signs

Adding to the cautionary signals, XRP’s Liveliness metric—tracked by Glassnode—reversed its downward trend and jumped to 0.809 yesterday. This marks a notable shift from recent weeks, during which the index had been declining.

Liveliness measures the ratio of "coin days destroyed" to total "coin days accumulated." In simpler terms, it reflects how actively older coins are being spent. A rising value suggests that previously inactive tokens are now circulating, often through exchanges or direct sales.

A low or falling Liveliness index usually signals accumulation and strong holding sentiment. But when it climbs—especially after a prolonged period of dormancy—it can indicate distribution is underway.

This reversal aligns with the spike in dormant circulation, reinforcing the idea that major players may be reducing their exposure to XRP at current price levels.

Market Momentum Turns Negative: Sellers Gain Control

Technical indicators are also flashing warning signs. On the daily chart, XRP’s Balance of Power (BoP) indicator is currently sitting at -0.62, indicating that sellers have taken firm control of market momentum.

The BoP measures the strength of buying versus selling pressure by analyzing price changes over time. A negative reading means downward momentum is building—often a precursor to further losses if not countered by strong demand.

With selling pressure intensifying and on-chain activity pointing to distribution, XRP appears vulnerable to downside movement. If bearish momentum continues, the token could test support near $2.08.

On the flip side, if buying interest returns and sellers are absorbed by strong demand, XRP might reclaim upward trajectory and aim for resistance around $2.29. However, given the current indicators, the path of least resistance appears to be downward.

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Frequently Asked Questions (FAQ)

What are dormant XRP coins?

Dormant XRP coins refer to tokens that have remained inactive on the blockchain for an extended period—typically 90 days or more. When these coins suddenly move, it often signals that long-term holders are taking action, such as selling or transferring assets.

Why is increased dormant circulation bearish for XRP?

Historically, spikes in dormant circulation correlate with profit-taking or loss avoidance by large holders. Since these investors often have better market insight, their decision to move coins can precede price drops, creating downward pressure.

How does the Liveliness metric affect XRP’s price outlook?

The Liveliness metric helps gauge whether older coins are being spent. A rising value suggests increased movement of long-held supply, which can indicate distribution. When combined with other bearish signals, it strengthens the case for potential downside.

Can XRP recover from this downturn?

Yes, recovery is possible if strong buying demand emerges to counteract selling pressure. A move above $2.29 could signal renewed bullish momentum, especially if on-chain activity shifts back toward accumulation.

What should investors do during periods of high dormant coin movement?

Investors should remain cautious and avoid impulsive decisions. Monitoring on-chain data alongside technical indicators can provide better context. It's also wise to reassess risk tolerance and consider dollar-cost averaging or setting stop-loss orders.

Is on-chain data reliable for predicting XRP price movements?

While not foolproof, on-chain data offers valuable insights into holder behavior and market sentiment. When combined with technical and macroeconomic analysis, it becomes a powerful tool for anticipating trends before they fully materialize.

What’s Next for XRP?

The convergence of rising dormant circulation, increasing Liveliness, and negative momentum paints a cautious picture for XRP as Q3 begins. While short-term volatility is normal in crypto markets, these signals suggest that informed holders may be positioning for weaker performance ahead.

That said, markets are dynamic. News developments, regulatory clarity, or broader macro trends could quickly shift sentiment back in XRP’s favor.

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For now, traders and investors should closely monitor:

Any sustained break above $2.29 could invalidate the current bearish setup, while failure to hold $2.08 might open the door to deeper corrections.

Final Thoughts

While panic is unwarranted, complacency isn’t advisable either. The recent awakening of dormant XRP coins serves as a reminder that behind every price chart are real actors making strategic decisions. Understanding their behavior through on-chain analytics gives retail investors a stronger edge.

As always, conduct thorough research and never invest more than you can afford to lose. Cryptocurrency markets move fast—being informed is your best defense.

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