XRP Whales Can Cause a Major Market Dump

YEREVAN (CoinChatper.com) — The XRP token price has exhibited low volatility in the previous two weeks, consolidating sideways at $0.62. However, the sleeping bulls might not be sleeping for long. Let’s take a look at the technical indicators first and then examine the XRP whale behavior for more clues.

A detailed view of the XRP price action revealed that the token has traded within a symmetrical triangle since its court-driven rally in mid-July. As CoinChapter previously reported, the triangle entails two converging trendlines with a similar slope. They connect the swing highs and lows, predicting a sharp move equal to the maximal triangle height, predicting a win or loss over 60%.

Notably, the formation does not predict a bias after a break in either direction. However, if the bears win, the price target for XRP would be $0.2, or 65% lower than the current value. There are a few additional factors that point to a bearish continuation, such as departing whales and a high realized market cap. Let’s take a closer look.

Whales Bail on XRP — Will They Be Back?

According to the latest on-chain data, the ranks of XRP whales, i.e., addresses with large amounts of tokens, have receded since mid-December. In detail, addresses holding over $10 million and $1 million in XRP tokens dropped to 411 and 1,320, respectively.

Generally, whale behavior could be construed as a ‘canary in the coalmines’ for a larger demographic of retail investors. They can also influence the market by creating selling pressure if they decide to unload some of their holdings.

However, the whale departure could be short-lived. According to the latest data, XRP’s realized market cap corrected downward in the previous three days, which might testify to the whales securing their profits. Notably, XRP’s market capitalization stood at $33 billion on Dec 25, a whopping $21 billion less than the Realized market cap, suggesting the majority of XRP investors are in profit.

Realized Market Cap declining

In detail, traditional market capitalization is the product of the current market price of a cryptocurrency and the total number of coins in circulation. Realized market cap, on the other hand, considers the price at which each unit of the cryptocurrency last moved. In other words, it’s the sum of the value of all coins at the price they were last traded rather than the current market price.

Generally, the high number of addresses in profit shows confidence in the underlying asset. Thus, it could be a bullish factor. However, when enough addresses are in profit, they tend to secure that profit by exiting the market. If that’s XRP Bulls’ plan, XRP might not reach the bullish target.

The slight realized market cap decrease in the previous days could mean that the whales took short-term profits and could be back. However, it is important to remember that RP also highly depends on wider market conditions, Bitcoin price fluctuations, macroeconomy, etc.