Altcoin
XRP Whales Add $55 Million, But Price Drops Again: What’s Happening?
- XRP Whales have increased token accumulation over the past 14 days
- However, this did not positively influence the price of the altcoin
XRP the price has maintained a downward trend in the charts lately. This, despite a spike in whale activity over the past two weeks.
In fact, on-chain data from Most Holy revealed that XRP whales holding between 1,000,000 and 10,000,000 tokens have acquired 110 million XRP worth around $55 million in this period.
Source: Santimento
Contrary to expectations, however, after the altcoin’s price peaked at $0.56 on May 6, it has since declined by 9%. At the time of writing, XRP was trading at $0.51 on the charts.
On-chain demand for XRP has collapsed
While a group of XRP whales have stepped up accumulation, the market has seen an overall decline in demand for the altcoin. For example, according to data from Santiment, XRP’s daily active address count observed using a seven-day moving average (MA) has declined by 27% over the past week.
Similarly, new demand for XRP has plummeted over the same period. Also observed using a seven-day MA, the daily count of new addresses involved in XRP transactions over the past week has decreased by 16%.
Source: Santimento
The reason for this is plausible. In the context of the overall market rally over the past seven days, XRP investments have mostly returned losses.
AMBCrypto evaluated the daily ratio between XRP transaction volume and profits/losses (7-day MA) and found that over the past week, for every transaction involving the altcoin that ended in a loss, only 0.91 transactions resulted in returned a profit. This means that XRP investors have recorded more losses than they have made profits over the past seven days.
As a result, the negative sentiment dragging the altcoin has gained momentum. At the time of writing, the token’s weighted sentiment was just -0.56.
Light The one from Ondulazione [XRP] Price forecast 2024-25
Futures traders remain focused
Interestingly, despite XRP’s low price movement over the past week, its futures traders have maintained a bullish outlook.
The token’s open interest has been trending upwards since early May. With figures of $583 million at the time of writing, it has increased 9% since then. Coinglass data.
Furthermore, the token funding rate on cryptocurrency exchanges also remains positive. In this case, funding rates are a mechanism used in perpetual futures contracts to ensure that the contract price remains close to the spot price.
Source: Coinglass
When an asset’s financing rate is positive, its contract price is higher than the spot price. This is a sign that more and more traders are holding long positions and expecting a price rally on the charts.