Activities of large players drive market trends
XRP prices have soared 430% in the past 30 days to reach their highest levels since 2018, surprising many traders on Crypto Twitter. The rally began in early November as the Republican victory in the U.S. election reignited investor confidence in U.S. cryptocurrency companies such as XRP and Ripple Labs.
According to CryptoQuant data, large holders (commonly known as "whales") played an important role in this price surge. Fund flows between high-value wallets and exchanges have continued to be high over the past month, with activity several times higher than at any time in the past.
The buying or selling pressure from whales can have a significant impact on the market, and tracking these trends helps to gauge market sentiment. For example, when exchange inflows of a token increase significantly, it may indicate that whales are preparing to sell, which is often seen as a bearish signal for the market. Conversely, when a large amount of tokens flows out of exchanges, it may indicate that whales are accumulating, which is considered a bullish sign.
However, Woominkyu, an analyst at CryptoQuant, pointed out in an article on Monday that such whale activity typically occurs in sync with short-term price peaks (Local high), as mature market participants often sell their assets when retail investors flood in.
The correlation between price peaks and whale trading activity
Woominkyu points out that historical data shows a significant increase in large transactions by whales to exchanges (marked by red circles) is often closely related to peaks in the XRP price. This indicates that whales tend to transfer large amounts of XRP to exchanges for sale during short-term peaks or cycle peaks.
Woominkyu further supplements that:
The recent influx of large amounts of funds from whales to exchanges coincides exactly with XRP's price reaching a short-term peak of about $2.30. This may indicate that whales are preparing for potential profit-taking or increased market activity.
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