XRP price recently saw a significant surge, rallying by 40% and reaching an 8-month high. However, the rally appears to be losing momentum, as XRP now faces a potential pullback. 

This retreat is largely due to emerging selling signals among investors, signaling a possible shift in sentiment.

XRP Investors’ Selling Pressure Rises

Currently, the Price DAA (Daily Active Addresses) Divergence indicator is flashing a sell signal for XRP. This signal stems from declining investor participation despite the recent price rally, which triggered an immediate reaction in the market. The resulting selling pressure has contributed to a 6% price drop today, highlighting the influence of this sell signal.

As the Price DAA Divergence continues to warn of potential weakness, XRP faces challenges in sustaining recent gains. The drop in active participation following such a strong rally suggests that the enthusiasm among short-term holders may be waning. This sell-off trend indicates that XRP might face additional selling pressure if participation remains low.

XRP’s macro momentum aligns with the bearish signals, as the Relative Strength Index (RSI) has been in the overbought zone. Historically, when XRP’s RSI enters this territory, it often triggers a reversal as bullish sentiment reaches saturation. The presence of the RSI in this zone validates the recent sell signal, supporting the likelihood of a near-term price decline.

The overbought RSI indicates that XRP’s bullish momentum may be losing steam, and a price correction could follow. With the current conditions suggesting saturation, XRP’s price may struggle to maintain its recent highs. This technical indicator further confirms that XRP could be at risk of a pullback on the daily chart, likely affecting short-term investor sentiment.

XRP Price Prediction: Multi-Month High Ahead

Despite its recent 40% rally, XRP was unable to close above the 8-month resistance level at $0.73. As a result, the altcoin has already faced a 6% decline, signaling a possible correction phase in the near term.

XRP’s next likely support sits at $0.61, a level that has held as support previously. If selling pressure intensifies, however, XRP may fall further to $0.56, signaling deeper corrective action as investors secure profits.

The only way to invalidate the bearish outlook is if XRP reclaims $0.66 as a solid support level. Achieving this would set the stage for another attempt to breach $0.73, potentially renewing bullish momentum for the altcoin.