The sentiment behind XRP has been strongly positive recently. This was partly down to the strong gains XRP made to get January off to a good start. In fact, so far this month, the altcoin has rallied by 14.5%.
Since Tuesday, 06 January, there has been a sizeable retracement though as Bitcoin [BTC] faced a rejection at the local resistance at $94.5k. According to Santiment, there was a surge of positive sentiment during the recent retracement.
This was spurred by retail traders’ attempts to “buy the dip” as the price approached the $2-psychological support. The positive sentiment shift was contrasted by the $17.7 million outflows from the XRP Spot ETF- The first ever outflows.
Whale accumulation and profit-taking activity trends give XRP bulls hope
The supply distribution trends among small and large XRP holders revealed a trend of accumulation, especially among the whale cohorts. The supply in retail holders’ wallets has been increasing, but these wallets don’t move the markets.
From September to late October-early November, wallets with over 100k XRP were falling in number. Among some cohorts, such as the 1 million- 100 million (brown and yellow), the drop was pronounced in these months.
Since mid-November, all the whale cohorts except one (the 1 million- 10 million XRP holding wallets) have been accumulating.
That was not all. Whale accumulation has accompanied a distinct lack of profit-taking activity as well. The Coin Days Destroyed metric captured the movement of XRP, with the same being previously dormant.
A hike in CDD means a high volume of coins in storage for the long term has been moved – Signifying a sell-off. The most recent CDD spike came on 10 December, while the latest rally did not quite spur any sizeable profit-taking.
The spot taker CVD metric also signaled a buyer-dominant market phase. Takers, or market orders, move prices. The buyer dominance since November seemed to line up well with what the whale supply distribution hinted at too.
Finally, long-term holders have continued to HODL. There seemed to be evidence for whale accumulation too, with the spot market being driven by buyers. Together, these conditions hinted at bullishness.
XRP’s rally is likely to resume and climb past $2.4 in the coming weeks, especially if Bitcoin can climb above the local resistance at $94.5k.
Final Thoughts
- XRP’s rally to $2.41 and subsequent retracement was an encouraging sign of a bullish trend shift and not a relief bounce for profit-taking.
- Evidence pointed to strong spot buying activity since November and a hike in whale accumulation.
