XRP Whale Activity Shows Confidence Amid Initial Spot ETF Outflows

XRP whale behavior signals confidence despite the first spot ETF outflows

Summary:
Recent positive sentiment around XRP follows a strong performance at the start of January, although there has been a notable retracement since Bitcoin faced resistance. Despite outflows from the XRP Spot ETF, data suggests that large holders, or 'whales', are accumulating the asset, which could indicate confidence in the long-term price movement.

Key Takeaways:

XRP has seen a 14.5% rally in January.
Recent outflows of $17.7 million were recorded from the XRP Spot ETF.
Whale accumulation trends suggest bullish sentiment among large holders.
Market conditions indicate potential for XRP to rise past $2.4 if Bitcoin exceeds resistance levels.

Recent XRP Performance

The sentiment surrounding XRP has been quite favorable lately, primarily driven by the impressive gains made since the beginning of January, where the altcoin surged by 14.5%. However, as of Tuesday, January 6, there has been a significant price correction after Bitcoin [BTC] encountered resistance at the $94.5k level. Santiment's insights reveal a spike in positive sentiment during this recent pullback, largely attributed to retail traders looking to “buy the dip” as XRP approached the significant psychological support level of $2.

XRP Sentiment
Source: Santiment

Despite the shift in sentiment, XRP faced outflows amounting to $17.7 million from the Spot ETF, marking its first outflows.

Trends in Whale Accumulation and Profit-Taking

XRP Supply Distribution
Source: Santiment

The distribution of XRP supply reveals a positive trend, especially among large holders known as whales. While the number of XRP held by retail investors has been on the rise, these smaller wallets typically have less impact on market movements. From September through late October to early November, the number of wallets holding over 100,000 XRP decreased, particularly among the groups holding between 1 million and 100 million XRP.

Since mid-November, most whale cohorts, with an exception of the 1 million to 10 million XRP holders, have been actively accumulating.

XRP Coin Days Destroyed
Source: Glassnode

Significantly, the whale accumulation has coincided with minimal profit-taking activity, which is highlighted by the Coin Days Destroyed (CDD) metric. An increase in CDD indicates significant long-term holdings being moved, typically suggesting a sell-off. The last notable spike in CDD occurred on December 10, yet the recent rally did not trigger substantial profit-taking.

XRP Spot Taker CVD
Source: CryptoQuant

The spot taker CVD metric also indicates that the market is currently biased towards buyers. Since November, buyer dominance has aligned well with the whale supply distribution trends.

Long-term holders appear to be holding onto their investments, and signs of whale accumulation suggest a strong buying phase in the spot market. Altogether, these indicators point towards a bullish outlook.

In summary, with Bitcoin's potential rise above local resistance, XRP's rally could continue and may surpass the $2.4 mark in the coming weeks.

Final Thoughts

XRP's recent movements, underpinned by whale activities and a commit to holding, suggest a resilient outlook against external market pressures. As cryptocurrency investors, keeping an eye on both large-scale movements and market sentiment can provide valuable insights into future trends.