Market analysis firm Santiment says large XRP wallets have accumulated cryptocurrencies to an extreme extent.
XRP's momentum is also being driven by selling by investors trying to take profits.
XRP reached $1.26, a price not seen since November 2021.
The XRP cryptocurrency reached a price of $1.26 this week, a value not seen since November 11, 2021, driven by the activity of large holders.
Santiment, a market analysis firm, suggests that this rally is due to massive accumulation by significant wallets, which it calls “whales and sharks,” holding between 1 million and 100 million tokens.
In the past week, these entities have collectively accumulated 453.3 million more tokens, worth approximately $526.3 million, according to data from the organization.
Santiment explains that this rise in the price of XRP has not only been influenced by the accumulation of these large portfolios, but also by the sale of retail investors looking to make quick profits.
According to the firm, wallets holding less than 1 million XRP have sold 75.7 million tokens in the same week, equivalent to approximately $87.9 million.
Historically, a cryptocurrency’s tendency to grow in market cap has been observed when its major shareholders increase their holdings and confidence in the asset, while fear, uncertainty and doubt (FUD) among small investors further drives this trend, says Santiment.
This behavior has been evident in the case of XRP, currently the sixth-largest cryptocurrency by market capitalization.
Other factors are driving XRP
Although Santiment's statements refer only to the behavior of large XRP holders and retail investors, the cryptocurrency's recent price surge has also been influenced by several external factors.
Relevant announcements and court rulings this year have played a crucial role. As CriptoNoticias reported, XRP is approaching its highest price of the year and could surpass it at any time.
XRP’s rise is the result of multiple causes. First, the rise in the price of Bitcoin (BTC), which has the largest market capitalization, tends to drag other cryptocurrencies down with it.
Due to their smaller market cap, altcoins like XRP tend to be more volatile and can experience larger percentage increases with BTC’s upward movement. Additionally, the injection of liquidity due to interest rate cuts by the US Federal Reserve has benefited the broader market.
On the other hand, the political landscape has also played its part. Donald Trump, the US president-elect, promises a more favorable stance towards cryptocurrencies, including the removal of Gary Gensler, the current SEC chairman, known for his critical approach towards the industry.
On the other hand, Ripple, the company behind XRP, has been making progress on several fronts. The introduction of RLUSD, its stablecoin, and educational projects, add value and visibility to the Ripple ecosystem, potentially boosting the value of XRP in the market.
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