What To Expect From XRP This June?

Introduction

XRP has recently witnessed a significant price correction, largely eroding May's gains and shifting market sentiment from bullish to bearish as June commences. As the second quarter draws to a close, market participants are keenly observing whether this downward trajectory will continue or if a much-needed recovery is on the horizon. This article delves into historical trends, investor behavior, and potential catalysts to provide a comprehensive outlook for XRP in June.

Key Takeaways

• Historical Weakness: June has historically been a challenging month for XRP, with a median monthly return of -8.49% over the past 11 years.

• Long-Term Holder Sell-Off: The Coin Days Destroyed (CDD) metric shows a sharp spike, indicating significant selling pressure from long-term holders.

• SEC Lawsuit Resolution as Catalyst: The impending conclusion of the SEC lawsuit against Ripple is viewed as a major positive catalyst that could accelerate Ripple's potential IPO and attract substantial investment.

• Critical Price Levels: XRP faces crucial support at $2.12, with potential drops to $2.02 or $1.94 if this level is breached. A recovery past $2.27 could signal a bullish reversal.

• Institutional Interest Beyond ETFs: While an XRP ETF is anticipated, some experts suggest that direct institutional investments in Ripple (post-IPO) or other indirect investment avenues might become more relevant.

XRP's Historical Performance: A Challenging June Ahead?

Historically, June has proven to be a challenging month for XRP investors. Analysis of the past 11 years reveals a median monthly return of -8.49% for XRP in June. This recurring pattern suggests that the month may not be favorable for profit-seeking holders, particularly in the wake of recent price depreciation. This consistent historical trend implies that XRP could continue to face selling pressure throughout June. Investors are advised to exercise caution, as typical seasonal weakness might exacerbate the prevailing bearish sentiment, further impacting the altcoin's price.

Long-Term Holders Signal Caution with Increased Selling Activity

Examining broader market indicators, the Coin Days Destroyed (CDD) metric shows a pronounced spike. CDD quantifies the economic significance of on-chain transactions by multiplying the number of coins spent by the number of days they were held. A high CDD indicates that long-term holders (LTHs) are moving their dormant coins, often signaling profit-taking or a loss of conviction.

XRP's CDD currently stands at 337 billion, marking its highest level since December 2024. This surge suggests that a substantial number of LTHs are liquidating their XRP holdings, likely to secure profits or mitigate further losses. The increased sell-off from these experienced investors points to diminishing confidence in XRP's ability to quickly reclaim its previous highs. Given that LTHs are often considered the foundational support of an asset, their selling activity could exert significant negative pressure on the price.

The Looming Catalyst: Resolution of the SEC Lawsuit

Despite the current headwinds, XRP possesses a significant potential upside catalyst: the impending conclusion of the SEC lawsuit. This long-standing legal battle, expected to resolve soon, represents a pivotal moment for XRP. Alexis Sirkia, Captain of Yellow, highlighted that he believes this resolution will be a key factor in accelerating Ripple's potential Initial Public Offering (IPO).

Sirkia elaborated, "Of course, everyone is waiting for the SEC lawsuit to be over and for Ripple IPO time. Ripple is the biggest crypto holder in the space, even larger than MicroStrategy. Owning 50% of XRP supply, Ripple, if it becomes public, should be an attractive investment with over $120 billion USD worth of XRP in treasury, which is more than double that of MicroStrategy. Ripple would become the largest public crypto holding company in the world, which I believe will make it attract attention and investment, positively affecting XRP price."

XRP Price Action: Navigating Key Support Levels

XRP has been on a downward trajectory since mid-May, currently trading around $2.16. While the altcoin remains above a crucial support level of $2.12, the prevailing outlook suggests potential for further declines as bearish momentum intensifies.

Should XRP breach the $2.12 support, the price could slide towards $2.02, and a failure to hold that level might see it drop further to $1.94. Such a decline would establish a two-month low and could trigger exacerbated selling pressure. This bearish sentiment is reinforced by the Relative Strength Index (RSI), which is currently positioned below the neutral line, indicating a lack of buying momentum.

However, a potential game-changer that could alter the altcoin's direction is the long-anticipated XRP Exchange-Traded Fund (ETF). While it remains unapproved, an XRP ETF is expected to draw considerable institutional investment. Yet, Alexis Sirkia suggests that the immediate future for XRP might not solely hinge on an ETF.

Sirkia noted, "There seems to be a shift in interest from ETFs like Grayscale, which are seeing significant declines in holdings, while companies holding Bitcoin like MicroStrategy seem to be performing better and increasing their holdings. So newcomers to XRP like Hyperscale or VivoPower might actually become more relevant than XRP ETFs when they are approved, and as MicroStrategy (now Strategy) showed us, it might not matter as long as the investor has an option to indirectly invest in XRP."

Therefore, such indirect exposure could significantly bolster XRP's price. Furthermore, if smaller investors begin accumulating the XRP being sold by long-term holders, the altcoin could find a bounce from the $2.12 support level. A decisive recovery past the resistance at $2.27 would invalidate the bearish thesis and potentially propel XRP's price towards $2.50.

Fast Facts

• Median June Return (Past 11 Years): -8.49%

• Current Coin Days Destroyed (CDD): 337 billion (highest since December 2024)

• Key Support Level: $2.12

• Next Support Levels: $2.02, $1.94

• Key Resistance Level: $2.27

• Ripple's XRP Holdings: Approximately 50% of the total XRP supply

• Estimated Value of Ripple's XRP Treasury (if public): Over $120 billion USD

Conclusion

June presents a complex picture for XRP. Historically, the month has been unfavorable, and current market indicators, particularly the spike in Coin Days Destroyed, suggest ongoing selling pressure from long-term holders. However, the impending resolution of the SEC lawsuit stands as a powerful potential catalyst, with experts like Alexis Sirkia anticipating significant positive implications for Ripple's future and, consequently, XRP's price. While the immediate price action points towards potential further correction, the long-term outlook could shift dramatically upon the lawsuit's conclusion and the emergence of new institutional investment avenues. Investors should monitor key support and resistance levels closely and remain informed about developments in the legal proceedings.

FAQ

What is the historical performance of XRP in June?

Historically, June has been a challenging month for XRP, with a median monthly return of -8.49% over the past 11 years, indicating a tendency for price declines.

What does the Coin Days Destroyed (CDD) metric indicate for XRP?

The recent sharp spike in XRP's CDD (currently 337 billion) suggests that long-term holders are moving their coins, often indicating profit-taking or a decrease in conviction, which can lead to selling pressure.

How might the SEC lawsuit affect XRP's price?

The impending conclusion of the SEC lawsuit against Ripple is widely seen as a major positive catalyst. A favorable resolution could pave the way for Ripple's IPO and attract significant institutional investment, potentially boosting XRP's price.

What are the key price levels for XRP to watch in June?

XRP's crucial support level is at $2.12. If it breaks below this, it could fall to $2.02 or even $1.94. On the upside, a recovery past the resistance at $2.27 could invalidate the bearish outlook and propel the price towards $2.50.

Is an XRP ETF imminent?

While an XRP ETF is highly anticipated, its approval timeline remains uncertain. Some experts suggest that direct institutional investment in Ripple (post-IPO) or other indirect investment vehicles might become more significant than an ETF in the near term.