XRP Faces Stagnation Despite Bullish On-Chain Dormancy Peak
Why has XRP remained confined to a narrow trading range while Bitcoin and Ethereum post weekly gains, even as a key bullish metric signals potential recovery?
Analyzing XRP's On-Chain Dynamics and Price Resistance
The XRP price has traded within a tight band of $1.81 to $2.28 since mid-November 2025, reflecting a lack of decisive momentum amid broader market uptrends. This stagnation persists despite a notable on-chain development: dormancy levels, which measure the inactivity of older tokens, have reached their highest point in three months. Dormancy rises when fewer spent coins—tokens that have been transacted—circulate, typically reducing selling pressure and fostering conditions for price appreciation. However, countervailing forces from long-term holders appear to be offsetting this positive signal, limiting any breakout potential.
Dormancy Surge Contrasts with Declining Spent Coin Activity
On-chain data reveals a sharp decline in spent coin volume, dropping 91% from 186.36 million XRP on November 15, 2025, to just 16.32 million XRP currently. This marks the lowest level in three months and has directly contributed to the dormancy peak.
- Implications for Market Pressure: Lower spent coin activity indicates reduced circulation of older supply, which historically correlates with diminished selling pressure. In typical conditions, this setup supports price recovery by stabilizing supply dynamics.
- Historical Context: Similar dormancy highs in prior cycles have preceded XRP rallies, as inactive holdings signal accumulation phases. However, the current environment shows dormancy’s influence being muted by other factors.
- Market Trends: With Bitcoin and Ethereum advancing, XRP’s failure to follow suggests localized resistance, potentially tied to Ripple-related uncertainties or broader altcoin underperformance. Analysts note that while dormancy alone boosted XRP by up to 20% in past instances, sustained gains require alignment with holder behavior.
This metric’s strength underscores a potential bottoming process, but without broader confirmation, it remains a fragile bullish indicator.
Long-Term Holder Distribution Undermines Breakout Momentum
Despite the dormancy uptick, HODL Waves data—tracking supply distribution by holding duration—indicates ongoing outflows from conviction cohorts, eroding upside potential. Over the past month, these groups have reduced their holdings as follows:
- 6-12 month cohort: Decreased from 26.18% of total supply to 21.65%.
- 1-2 year cohort: Fell from 9.34% to 8.61%.
- 2-3 year cohort: Eased slightly from 14.58% to 14.12%.
- Price Range Analysis: XRP must achieve a daily close above $2.28 to escape its current range, targeting subsequent resistance at $2.56 and $2.69—levels that have historically triggered reactions. A breakdown below $1.98 could accelerate declines toward $1.81, signaling structural weakness.
- Broader Implications: This tug-of-war highlights risks in altcoin markets, where on-chain positives can be negated by holder sentiment. If distribution persists, XRP’s market share—currently around 2-3% of total crypto capitalization—may lag peers, potentially delaying recovery until 2026.
- Uncertainties: While HODL data is verifiable through blockchain analytics, exact motivations for holder sales remain speculative, possibly influenced by macroeconomic factors like interest rate expectations (no direct causation confirmed).
These long-term holders control a significant portion of XRP’s supply, and their distribution reflects waning confidence, overpowering recent whale accumulation efforts. Whale buying has increased exposure in shorter-term bands, yet persistent outflows from older cohorts continue to cap demand.
In summary, XRP’s dormancy peak offers a data-driven case for stabilization, but long-term holder trends suggest caution, with price action hinging on a $2.28 breakout for renewed momentum. How do you see long-term holder behavior influencing XRP’s trajectory in the coming months?