XRP has maintained a downtrend since reaching an all-time high of $3.40 on January 16. It currently trades at $2.18, noting a 35% price drop over the past two months.

The double-digit dip has led to a decrease in the amount of XRP tokens held in profit. On-chain data shows that the bearish sentiment against the altcoin is climbing, hinting at an extended decline. 

XRP Sees Drop in New Demand, Signaling Market Interest Slowdown

As XRP’s price falls, its total supply in profit has also reduced. According to Santiment, this has shrunk by 6.39 billion over the past week to fall to its year-to-date low. 

As of this writing, 87.95 billion tokens out of a total supply of 99.98 billion are held at a profit. This signals that some investors are now holding XRP at a loss, reflecting increased selling pressure and weakening market sentiment.

Moreover, on-chain data also shows a slump in new demand, with daily fresh purchases of XRP seeing a notable drop this month. Per Santiment, only 4,516 new wallet addresses were created on Sunday to trade XRP.

This represented the lowest daily count of new XRP demand since the beginning of the year. 

When an asset sees a drop in new demand, it means fewer investors are buying it. As observed with XRP, this has reduced trading activity and weakened price support in its spot market. It signals waning market interest in the altcoin and can contribute to further price declines if selling pressure remains high.

XRP Faces Selling Pressure: Will Bulls Break the Downtrend?

On the daily chart, XRP has traded below a descending trend line since reaching its all-time high, reflecting the downward trend.

This bearish pattern is formed when an asset’s price consistently creates lower highs over time. It suggests that sellers are in control, and unless the price breaks above the trend line, further declines are likely.

XRP trades at $2.17 at press time, significantly below this descending trendline. With a growing bearish bias, the token’s price might fall further from this trendline. In that scenario, XRP’s value could drop below $2 to $1.47.

However, if buying pressure gains momentum, XRP could break above its descending trendline and climb to $2.93. 

The crypto market has kicked off the week with a sharp downturn, as a wave of liquidations wiped out $620.5 million in the past 24 hours.

The sell-off was fueled by a steep decline in Bitcoin’s (BTC) price, which plunged to as low as $80,000 over the weekend. The sudden drop triggered widespread margin calls, forcing traders out of leveraged positions and amplifying volatility across the market.

Crypto Market Hit by $620 Million Liquidation Wave

According to data from Coinglass, the past 24 hours saw a massive shakeout in the crypto market, with 225,381 traders liquidated. 

Long positions took the hardest hit, accounting for $529.4 million in losses. Meanwhile, short positions saw $91.1 million in liquidations.

Bitcoin led the liquidation spree, with $239.5 million in positions wiped out. $205.6 million came from long traders caught off guard by the market downturn, triggering forced sell-offs. The largest single liquidation order occurred on Binance, where a BTC/USDT position worth $32.0 million was wiped out.

Analyst Ash Crypto highlighted the severity of the recent market turmoil in the latest X (formerly Twitter) post.

“Bitcoin long liquidations in all exchanges exceeds 3AC, Celsius and FTX collapse,” the post read.

Data from CryptoQuant shows that Bitcoin’s long liquidations surged to 14,714 yesterday. For comparison, 13,453 BTC were liquidated during the Celsius crash, 1,807 BTC during the FTX collapse, and 1,311 BTC in the Three Arrows Capital (3AC) meltdown.

The wave of liquidations comes as Bitcoin struggles in the market, facing renewed downward pressure. Contrary to expectations, President Donald Trump’s Strategic Bitcoin Reserve executive order triggered a sharp decline in Bitcoin’s value.

Furthermore, the downturn intensified as recession fears escalated, adding further uncertainty to the market.

“An ugly start to the week. Looks like BTC will retest $78,000,” Arthur Hayes, former BitMEX CEO wrote.

He predicted that if $78,000 fails to hold, $75,000 will be the next critical support level. Hayes also pointed out a large amount of open interest (OI) in Bitcoin options between $70,000 and $75,000. Thus, if BTC enters that range, it could lead to heightened volatility.

For now, BTC continues to hold above $80,000. At the time of writing, it was trading at $82,629, down 3.9% in the past 24 hours. 

Market Plunge Forces Crypto Whales Into Liquidation Chaos

The broad impact of Bitcoin’s price drop was felt across the sector. The total crypto market cap suffered a $148 billion drop. Ethereum (ETH) was the second most affected asset, with $108.5 million in liquidations. As per BeInCrypto data, ETH was down 5.3% over the past day, trading at $2,062 at press time.

The downturn has placed whales under increasing pressure, with some now facing the risk of massive liquidations. According to Lookonchain data, a whale holding 65,675 ETH (worth $135.8 million) on Maker is on the verge of liquidation. 

The whale’s health rate has dropped to 1.05, with a liquidation price set at $1,931, raising concerns about potential forced sell-offs if ETH continues to decline.

Additionally, an on-chain analyst revealed that World Liberty Financial’s (WLFI) investment portfolio has suffered heavy losses. The firm had initially invested $336 million across nine tokens. Yet, the portfolio’s value has plunged to $226 million, marking a $110 million loss. 

Ethereum makes up 65% of the entire portfolio, making it the most affected asset. The average purchase price of ETH was $3,240, but with ETH now trading around $2,000, the DeFi project has suffered a 37% loss, amounting to $80.8 million.

Despite the turmoil, OnchainLens reported that a whale has increased long positions across multiple assets, including Solana (SOL), Ethereum, dogwifhat (WIF), and Bitcoin.

The positions have turned against the trader, who is now sitting on an unrealized loss of $14.3 million. The whale still has an open order worth $8.4 million for these tokens, further increasing risk exposure. Moreover, the whale supplied 19,413 ETH to fund these trades and borrowed $16.2 million USDC to go long on HyperLiquid.

However, not all whales are losing money in this market shakeout. Data from Lookonchain highlighted that another whale has successfully shorted BTC multiple times during recent price drops. The trader has accumulated an unrealized profit of over $7.5 million.

“He has now set additional short positions at $92,449 – $92,636 and placed limit orders to take profit between $70,475 – $74,192,” the post further added.

Crypto markets brace for volatile days ahead, with key US economic data due for release this week, starting Tuesday. These macroeconomic events could affect the portfolios of Bitcoin (BTC) holders, making it imperative for investors to adjust their trading strategies.

Economic developments are progressively influencing Bitcoin market sentiment, increasing the likelihood of volatility this week.

US Economic Data With Crypto Implications This Week

The following macroeconomic data points could influence Bitcoin sentiment this week.

JOLTS

Starting the list of US economic data with crypto implications this week is the release of US job openings data on Tuesday, March 11. Commonly referred to as the Job Openings and Labor Turnover Survey (JOLTS), this data point could significantly sway Bitcoin sentiment by providing insights into the health of the labor market and broader economy.

If the data indicates a strong labor market with high job openings—say, exceeding the previous 7.6 million mark—it might signal persistent economic strength. This could reduce expectations for imminent Federal Reserve (Fed) rate cuts.

Historically, a strong labor market can bolster the US dollar and traditional assets like stocks, drawing investors away from riskier assets like Bitcoin. This could dampen Bitcoin sentiment, as investors might perceive less need for a decentralized hedge against monetary easing.

Conversely, if job openings come in lower than anticipated, it could heighten recession fears or signal a cooling economy. Such an outcome would prompt speculation of Fed intervention through rate cuts. This scenario often boosts Bitcoin’s appeal as a “digital gold” or haven, potentially driving positive sentiment and price momentum among crypto enthusiasts.

CPI

The US CPI (Consumer Price Index) data, set for release on Wednesday, March 12, could also sway Bitcoin sentiment. This data will signal inflation trends that influence Fed policy.

A higher-than-expected CPI forecasted at 2.9% compared to the previous 3.0% might suggest persistent inflation. This would reduce hopes for rate cuts and strengthen the dollar, dampening Bitcoin’s appeal as a hedge. Such an outcome could lower sentiment and prices as investors favor traditional assets.

On the other hand, a softer CPI could fuel expectations of looser monetary policy, weakening the dollar and boosting Bitcoin as a risk asset. This would lift sentiment among crypto traders.

“CPI report on Wednesday – Core Inflation number going to come in cool – potentially lower than most expect. BTC will pump,” one user on X stated.

Initial Jobless Claims  

The US Initial Jobless Claims data, due Thursday, March 13, could also sway Bitcoin sentiment by reflecting labor market strength or weakness.

If claims drop below the expected 220,000 (following last week’s 221,000), it might signal a strong economy. This could strengthen the dollar and shift investors’ focus to traditional assets like stocks. Such an outcome would dampen Bitcoin’s appeal as a risk asset, lowering sentiment.

Meanwhile, higher-than-expected claims might indicate economic softening, raising hopes for Fed rate cuts. This often boosts Bitcoin as a hedge against fiat weakness, lifting sentiment and prices.

PPI

The US PPI (Producer Price Index) data, scheduled for release on Thursday, March 13, could impact Bitcoin sentiment by revealing wholesale inflation trends.

A higher-than-expected PPI, forecasted at 0.3% month-over-month, might indicate rising producer costs, potentially signaling persistent inflation. This could reduce expectations for Fed rate cuts, strengthening the dollar and pressuring Bitcoin as a risk asset, thus dampening sentiment.

However, a lower PPI could ease inflation fears, boost rate-cut hopes, and enhance Bitcoin’s appeal as an inflation hedge, lifting sentiment.

“A huge week for economic data, with JOLTS, CPI & PPI. We could either see some strength and markets claw back some of the losses of the last couple of weeks, or confirmation there are underlying issues and markets continue to sell off,” market analyst Mark Cullen indicated.

Consumer Sentiment

The US Consumer Sentiment Index, due for release on Friday from the University of Michigan, could significantly influence Bitcoin sentiment by reflecting public confidence in the economy.

A strong reading, potentially above the anticipated 64.0 (based on recent trends), might suggest optimism about economic stability, bolstering traditional markets and the dollar. This could dampen Bitcoin’s allure as a hedge against uncertainty, leading to bearish sentiment among crypto investors, as funds might flow toward equities.

Conversely, a weaker-than-expected figure could signal economic unease, enhancing Bitcoin’s appeal as a decentralized asset amid fears of inflation or recession. This would boost bullish sentiment and potentially its price. Given Bitcoin’s sensitivity to macroeconomic cues, this data could sway trader perceptions sharply.

“The University of Michigan’s consumer sentiment survey can tell us how optimistic people feel about the economy. This can impact consumer spending, which is a major driver of economic growth,” Pennybois Trades Alert highlighted in a post.