Ripples native token, XRP, could be facing significant challenges, as recent on-chain data indicates a sharp decline in whale flows, which is typically considered a warning sign for significant price corrections.

Large holders are unloading tokens at a pace not seen since February’s local top, raising concerns that the current consolidation above $2.70 may give way to deeper downside unless buyer momentum returns.

Technical Pressure Meets Whale Exodus

Data from CryptoQuant, highlighted by pseudonymous analyst The Enigma Trader, shows XRP’s 90-day moving average whale flow has plunged into negative territory, indicating sustained outflows from major wallets.

This pattern closely resembles behavior from deep-pocketed investors observed in January and February this year, which coincided with a local price top and a subsequent correction.

Unless we see sustained positive whale flows, the market may remain structurally weak, the analyst warned, noting a current absence of consistent accumulation by heavyweight holders.

This wave of selling comes just weeks after XRP’s July rally saw the token pump by 70%, briefly breaching $3.40 and triggering a wave of retail FOMO.

As detailed in CryptoPotato’s latest XRP health check, that move above $3.40 likely acted as a bull trap, tapping into buy-side liquidity before a swift reversal.

On-chain dynamics are also reflecting a tug-of-war. While the token’s exchange reserves have plunged from 3.02 billion to 2.3 billion since July 24, suggesting that some traders are moving tokens off platforms to hold, the lack of whale accumulation may be a sign that distribution is dominating.

This divergence, paired with a surging NVT ratio, up 44% in 24 hours, highlights a growing mismatch between market valuation and actual network use.

Sideways Drift or Deeper Correction?

At the time of this writing, XRP was changing hands for $3.30, up 10.8% in 24 hours and 11% on the week. In the last 14 days, the token is up by 7%, but the monthly chart still shows a strong 42% gain, largely driven by July’s breakout. Relative to the all-time high recorded in that period, the asset is now down over 15%.

Despite the bearish whale signals and technical caution, there are still some significant catalysts looming that could give XRP a boost.

Institutional adoption is increasing. Major news emerged from South Korea yesterday, where licensed institutional custodian BDACS launched XRP custody services in a market where the cryptocurrency is widely held.