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- XRP has surged 430% in a month, driven by whale activity and renewed investor confidence after the U.S. elections.
- Analysts warn of potential corrections due to circulating supply concerns and whale profit-taking near price peaks.
XRP has soared 430% over the past month, achieving price levels not seen since 2018. The rally gained momentum following the Republican victory in the U.S. elections, which bolstered investor confidence in tokens tied to U.S.-based firms like Ripple Labs, XRP’s affiliate company.
Whale activity has significantly contributed to XRP’s recent price rally. Recently, the data from CryptoQuant revealed that whale transactions have been on the rise, with large transactions in and out of exchanges over the past month. This increased activity has been key to the upward movement of XRP, as seen in the prices.
Whales play a critical role in shaping market trends. From their trades, one can be able to deduce the mood of the market. High volume deposits of XRP to exchanges can be indicative of sell pressure, a bearish scenario. On the other hand, large outflows are often associated with the accumulation of assets, and are, therefore, bullish.
Indicators of Market Sentiment
According to CryptoQuant analyst Woominkyu, such whale movements are normally followed by local peaks in the price. The research reveals that high whale-to-exchange transactions usually occur when XRP crosses certain price points.
“Significant spikes in whale-to-exchange transactions have historically matched XRP price peaks,” Woominkyu stated. “This pattern suggests that whales tend to sell near local or cycle tops.”
Whale activity increased drastically at the same time, and the price of XRP was $2.3. This may be attributed to the whales selling to take profit or increased market activities. Such movement could be a key determinant of the short-run price of XRP.
XRP Outpaces Crypto Majors
Over the past 24 hours, XRP has done significantly better than other major cryptocurrencies, such as Bitcoin, rising 14%. This tremendous surge has positioned the token to overtake Solana’s SOL and USDT in market capitalization. At the time of writing this article, XRP remains the third-largest cryptocurrency in terms of market capitalization.
While XRP’s rally has excited many, some analysts remain cautious. Recently, a market commentator known as IncomeSharks raised a question about XRP and the circulating supply, as well as the tokens that are locked in escrow. At the moment, 43% of the entire XRP supply is locked up, which leads to some speculations regarding the market. The analyst referred to this as a meme coin influenced by developers and noted that this was a problem for investors.
Historical data from IncomeSharks indicates that the price of XRP has undergone sharp rises and quick declines. The analyst also expects the same, with the current rally that could push the price as low as $0.60. This would result in a 77% decline from the existing levels, thus reversing the recent rally.
The proponents of XRP have shrugged off the warnings, stating that the volatility and price drops are not peculiar to XRP. Moon Lambo and other analysts have noted that Bitcoin and other investments have such phases of appreciation and decline.
Technical analyst Credibull opposed the claims made about the escrow system, saying that the locked tokens of XRP are gradually unlocked and not like other meme coins. As stated by Credibull, the release mechanism does not influence market prices because of the transparency of the mechanism.
