XRP Whales Offload 640 Million Tokens: Analyzing the Potential for a 30% Market Crash

Notable XRP Whales Let Go Of Significant Token Amounts

In a fascinating development in the crypto world, there has been a massive offloading of XRP tokens by significant holders, popularly referred to as ‘whales’. According to crypto analysts, this large-scale selling spree occurs after an accumulation of approximately 640 million tokens within the past month. When converted to monetary value, this sum equates roughly to $1.91 billion, underscoring the large scale of this transaction.

Fluctuations and Divergence in XRP Trading

Whilst these exchanges took place, prices of XRP were observed to oscillate between $2.28 and $3.54. This sideways movement further emphasized the inverse correlation between the trading momentum and the steady increase in XRP prices. This bearish divergence particularly raises a red flag about the potential weakening of the cryptocurrency’s market performance. An interesting datapoint to consider is the fact that this is not the first instance where such significant distribution has occurred during price rallies. A similar trend was observed in the period between November and January, where whales significantly reduced their XRP holdings despite the token price surging from $1.65 to $3.27.

Decoding Whale Activity in XRP

However, it is necessary to treat such outflows with a pinch of salt. Decoding these massive offloads can prove to be a complicated exercise. All sell-offs should not be mistaken for actual selling. The activities of these whales could merely be a restructuring or reshuffling within their holdings.

Inversely Related Whale Flows and XRP Corrections

Adding another layer to this complex puzzle is the discernable inverse pattern visible in the market. Consider the recovery of whale flows between January and April. This period coincidentally aligns with XRP’s market corrections that saw the token plunge from $3.27 to as low as $1.87. This pattern suggests a tendency among significant investors to accumulate during market weaknesses.

Impact on XRP’s Market Structure

According to a market analyst associated with CryptoQuant, XRP’s market may remain structurally weak unless whale addresses introduce an additional 5 million XRP or more. This addition is deemed necessary in the coming days to build support for the token’s market value. Analysts have determined a crucial support area that XRP must maintain, which sits above the $2.65 mark. If XRP’s price falls below this threshold, the market risks experiencing a crash toward $2. This risk manifests most significantly in the perceived bearish divergence that reflects a decrease in momentum accompanied by rising prices on weekly charts.

Future Predictions and Warnings

In recent weeks, the price of XRP has indeed made higher highs; however, the relative strength index (RSI) has been producing lower highs since January. This divergence gives signs of reduced upside momentum, even though the prices are trending upwards. This trait mirrors the market situation during the April 2021 market peak. The aforementioned correction in XRP’s market could push the price toward the 20-week EMA near $2.55, which aligns with the crucial $2.65 support. Any further dip below this range may lead to a deeper drop at the 50-week EMA at $2.06, making it a vital mean-reversion level after overly enthusiastic rallies.

Final note

As with any financial matter, it is essential to carry out adequate research before making any investment or trade decisions. This article reflects a mere observation and analysis of market scenarios and does not, in any way, serve as an investment guide or advice. In the world of crypto trading, volatility is a constant factor, and readers should exercise utmost caution and diligence in their financial endeavours.