XRP Price Prediction: on-chain Liquidity Increases, Long-term holders Begin to Take Profits?

According to on-chain data, a large amount of XRP tokens has recently flowed into the market from long-term holders, which may indicate that HODLers are cashing out their profits. Data from Santiment shows that the "average dollar investment age" of XRP has decreased, while the "consumed age" has significantly increased, indicating that portions of these tokens that had not been moved for a long time are now starting to flow into the market.

The decline in the average dollar investment age of XRP

According to data from the on-chain analysis company Santiment, the XRP network has recently shown signs of liquidity for old tokens. This trend is primarily displayed through two key indicators: average dollar investment age and consumed age. The average dollar investment age tracks the average "age" of each dollar invested in XRP tokens, which is the time (in days) from the last transaction of the tokens to the present.

(Source: Santiment)

For example, if a Token has been dormant in a wallet for 10 days, it has accumulated 10 "Token Days". If the Token was last traded at a price of 2 dollars, then its "Token Dollar Days" would be 20. In this case, the average investment age per dollar would be 10 "Token Dollar Days".

When these dormant Tokens are finally transferred, their "Token Days" and "Token Dollar Days" will reset to zero, meaning the "age" of the Tokens is "consumed". The consumed age metric tracks the Token Days that have been "consumed" in the network.

XRP consumption age significantly rises

Data shows that the average dollar investment age of XRP has decreased in the past few weeks, indicating that "old" tokens in the market are being transferred. This metric has now fallen to 593 days, down 91 days from a month ago. Meanwhile, the Age Consumed has also seen a significant rise, suggesting that long-term holders are taking action.

These long-term holders usually refer to those steadfast HODLers who hold their tokens for an extended period, accumulating a large number of "token days." When these "diamond hands" finally take action, the consumed age will experience significant fluctuations, as a large amount of "token days" are "destroyed" at the same time.

Holder behavior during the rise of XRP price

From the chart, it can be seen that the recent consumed age mostly appeared when the XRP price peaked, which may indicate that long-term holders cashed out their profits in this price range. Since then, the price of XRP has significantly retracted. The question now is whether the consumed age will continue to rise in the near future, or if HODLers have already finished their cashing-out cycle.

Conclusion

As XRP long-term holders begin to sell their tokens, the market may experience a period of adjustment. Changes in on-chain data provide us with valuable signals about market trends, but we still need to pay attention to trend changes in the near future. If the XRP price continues to pull back, whether holders will continue to cash in on profits will be a focal point worth observing.