Key Insights: Ripple (XRP) price is trending around $0.52 on […]
Ripple (XRP) price is trending around $0.52 on Feb. 3 down 5% within the weekly timeframe as investors react to Ripple co-founder, Chris Larsen getting hacked for $120M.
On-chain data shows that 28 whale investors cut down on their positions in the past week exacerbating the XRP price tumble.
The Parabolic SAR indicator suggests that the bears are still in the drivers’ seat.
Since the 0 million hack hit the newsreels on Jan 31, XRP price has been subject to intense volatility. Within hours of the news, XRP price slid to ~~FIRSTPARAGRAPHTAG~~.48, its lowest since October 19 2023
While Binance has reportedly frozen $4.2 million of the funds stolen for Ripple Labs co-founder Chris Larsen amid ongoing investigations, on-chain data trends show that investor confidence remains low across the XRP ecosystem.
How will this impact XRP price action?
28 Whales Disappear after the $120M Ripple Hack
XRP price experienced heightened volatility this week as markets reacted to the Ripple Labs co-founder Chris Larsen’s wallet getting hacked for $120 million. On-chain data shows that whale investors’ reaction to the hack may have triggered the bearish reversal to the 5 month low of $0.48 recorded on Jan 31.
Santiment’s Supply by Addresses metric, tracked the level of high-networth and whale investor involvement on a blockchain network by monitoring the number of wallets that hold at least $100,000 worth of coins in their balances.
The chart below shows that at the start of the week on Jan 28, a total of 1,986 wallets held at least 1 million XRP ($500,000) in their balances. But at press time on Feb 3, that figure has now dropped to 1,958 wallets.
Ripple (XRP) Whales Wallet Addresses vs. Price : Source: Santiment
This implies that 28 whale wallets have either exitted or cut down on their positions between Jan 28 to Feb 3. The timing suggests that the Ripple Labs co-founder wallet getting hacked for $120 million may have spooked the whale investors.
Lower whale involvement within a cryptocurrency ecosystem could be interpreted as a bearish signal for two main reasons.
Whales, due to their large holdings, often have the capacity to influence market trends. A decrease in their participation may indicate a potential loss of market momentum and a lack of influential players.
Secondly, whales contribute to liquidity in the market. A decline in their involvement might lead to lower liquidity, making the market more susceptible to rapid price fluctuations and potentially impacting overall market stability.
Hence, the outcome of the ongoing investigations surrounding the Ripple Labs’ co-founder wallet hack could have a significant impact on XRP price action in the days ahead.
Although Binance CEO Richard Teng has announced the seizure of $4.2 million XRP coins linked to the hack, it’s still a significantly low proportion of the loot estimated to be around $120 million.
XRP Price Forecast: Bears Remain in Control
Since the hack event was uncovered on Jan 31, XRP price has made a sharp 6% recovery from $0.48 to reclaim the $0.51 area. However, on-chain indicators show widespread bearish disposition among XRP whale investors could force another pullback in the days ahead.
Current trends observed on the Parabolic SAR indicator also support this bearish outlook. When the Parabolic SAR dot points above the current price, it suggests a potential reversal of the ongoing uptrend.
In this case, with the XRP Parabolic SAR dot pointing to $0.56 while the current price is $0.51, it confirms the negative outlook.
Traders often interpret this situation as a sell signal, as it implies that the price trend might reverse and start moving downwards.
If this scenario plays out as predicted, the bulls can mount significant support at the $0.50 psychological support to avoid widespread margin call triggers.