Despite a 10% gain since the beginning of December, XRP is facing a series of headwinds that could jeopardize its upward trajectory. With network velocity overheating, dominance of short positions in derivatives, and suspicious accumulation on Upbit, holders should remain vigilant. In-depth analysis of the factors impacting Ripple's token.
CryptoQuant data shows that XRP Ledger velocity has reached its highest level of the year. Revealing massive token circulation rather than long-term storage. According to CryptoOnchain, this surge reflects strong network activity, driven by traders and whale movements. This type of spike is often the precursor to significant price swings.
In this context, this extreme velocity makes XRP highly sensitive to external catalysts. In the event of negative news, circulating tokens could be liquidated quickly, erasing the gains recorded since early December. The risk of a violent market reaction increases proportionally with the fluidity of transfers.
The derivatives market reinforces this concern. Funding rates are predominantly negative, indicating clear dominance of short positions and a bearish outlook. In April, the same configuration preceded XRP’s drop below $2, which fuels the scenario of a retest of the critical zone between $1.9 and $2.0 if selling pressure continues.
XRP reserves on Korean exchange Upbit have reached 6.18 billion tokens, compared to 2.6 billion on Binance. After three months of continuous accumulation and a peak marked in 2025. This unusual concentration exposes the market to a major risk. A massive profit-taking move from the Korean side could generate violent selling pressure and weaken XRP’s current support.
This danger is reinforced by two bearish signals: Extremely high network velocity and clear dominance of short positions on derivatives markets. Under these conditions, a sudden liquidity unlock from Upbit could trigger a cascade of forced liquidations. This dependence on a single centralized platform acts as a structural vulnerability factor for XRP, in a context where volatility is intensifying.
However, positive elements remain. XRP ETFs are recording three consecutive weeks of net inflows, while Vanguard will authorize XRP ETF trading in December, after years of institutional blockage. These flows and this strategic support could absorb part of the selling pressure related to Upbit and help stabilize XRP’s price in its current zone, or even prepare a foothold for a future rebound.
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