Recently, XRP has been under significant pressure from selling, raising concerns about the continuation of its downtrend that has persisted for several months.

Despite initial gains, investors seem to be cashing in on their profits, which could trigger a price correction and impede the altcoin's attempts at recovery.

Investors are observed to be selling off their XRP holdings. Exchange reserves experienced a notable increase last week, with more than 17 billion XRP sent to Binance in just a week, totaling over $40.2 billion. This trend suggests that investors are aiming to secure profits or breakeven following a recent surge in prices. This surge in selling mirrors a similar occurrence in February 2024, leading to a subsequent decline in the price of XRP.

The surge in selling activities indicates a cautious market sentiment, as holders seem reluctant to take chances with potential market downturns. Profit-taking actions highlight investor concerns, making a short-term price correction likely as the supply overtakes the demand.

According to CryptoQuant data, XRP's exchange reserves have observed this spike in selling behavior. Technical indicators such as the Moving Average Convergence Divergence (MACD) also signal a weakening bullish momentum. A confirmation of a momentum reversal would occur if the MACD line crosses below the signal line (red), indicating a bearish crossover. This pattern often anticipates increased selling pressures and downward price movements.

XRP is currently trading at $2.39, down 6% in the last 24 hours. It remains constrained below a nearly four-month downtrend line, indicating a potential continuation of its decline. The $2.38 support level is crucial, and a failure to hold it could lead to a correction towards $2.12, with further downward pressure potentially pushing the price to $2.02 or lower.

Alternatively, a bounce from $2.12 and a successful transition of $2.27 into a support level could reignite bullish momentum. This could set the stage for XRP to challenge resistance at $2.56, potentially invalidating the bearish outlook and signaling the possible end of the prolonged downtrend, offering optimism for sustained price recovery.