Ripple (XRP) price dropped to $0.60 on Saturday, November 18, down 20% from its local top of $0.72 recorded just two weeks ago.
While retail investors show weak hands, crypto whales have invested $12 million this week, capitalizing on falling prices to buy the dip.
Critical on-chain data shows that Social Media mentions of XRP have dwindled considerably this week, indicative of a local market bottom and imminent trend reversal. widespread Fear, Uncertainty, and Doubt (FUD).
Ripple (XRP) price tumbled toward $0.60 on Saturday, November 18, down 20% from its local top of $0.72 recorded just 10 days ago. On-chain data analysis weighs in on how recent trading activity among XRP’s large corporate investors could trigger an early rebound next week.
Reason 1: Crypto Whales are Capitalizing on the Falling Prices
XRP emerged as one of the biggest losers in the top 10 crypto rankings this week. But despite $XRP’s 20% price drop over the past 12 days, corporate investors continue to buy XRP.
On-chain data from Santiment shows that there has been a noticeable increase in Large Transactions and Whale Holdings. As depicted below, when XRP price hit $0.72 on November 6, the corporate investors (wallets holding 10 million to 1 billion XRP) held a total of 16.6 billion XRP in their cumulative balances.
However, as of November 18, the whales have rapidly increased their holdings to 16.8 billion XRP. This implies that they capitalized on the falling prices to acquire 20 million XRP between November 6 and November 18.
XRP Price vs. Whales Wallet Balances| Source: SantimentValued at the current market price of $0.60 the recently acquired 20 million XRP are worth approximately $12 million. Such a large investment means that corporate investors remain confident in Ripple XRP ledgers’ fundamentals.
This buying frenzy among the big players could spur retail investors to halt the sell off long-positions at any moment.
Reason 2: Months of Large Transactions Has Improved Market Liquidity
Another major reason that could aid XRP’s quick price rebound is the rising spate of Large Transactions. According to the latest data pulled from Santiment, the XRP Ledger blockchain network recorded 113 Large Transactions on November 14, the highest since July 31.
Ripple (XRP) Price vs. Large Transactions (>$1m)| Source: SantimentThe Large Transactions metric tracks the number of transactions that exceed $1 million in nominal value on a given day. A steady increase in Large Transactions is regarded as a strong bullish indicator for two main reasons.
Firstly, Large Transactions contribute to the liquidity and depth of the market, making it easier for participants to buy or sell significant amounts without causing substantial price slippage.
Secondly, the increased liquidity is attractive to high volume traders and investors. In effect, this could attract even more prospective corporate investors to join the buying frenzy in the coming weeks.
If this thesis holds, it could be a precursor to a XRP price rebound next week.
Lastly, as XRP prices dipped this week, crypto traders switched focus to other top-charting tokens like Dogecoin (DOGE), and Shiba Inu (SHIB). In effect, the media hype surrounding XRP has reduced significantly.
In confirmation of this stance, Santiment’s chart illustrates that since rejecting at $0.72 on November 6, XRP’s Social Dominance has dropped from 3.86% to 1.5% as of Saturday November 18.
This decline in Social Dominance can be crucial to XRP price action next week, for a number of reasons.
Ripple (XRP) Social Dominance | Source: SantimentSocial Dominance measures the percentage of mentions that a cryptocurrency attracts in reference to the top-50 most talked about blockchain projects. Firstly, a decline in social hype is often an indication that the market has reached a local bottom. And strategic swing traders looking to buy at the bottom could consider this the perfect time to re-enter the XRP market.
Secondly, when an asset is devoid of media hype, prospective new investors often see the current prices at a fair market value of the token. Hence, if investors consider the current decline in XRP media mentions as a signal to enter the market, XRP price could make a bullish reversal next week and beyond.
In summary, the millionaire whales spotted buying XRP aggressively, the consistent rise in large transactions, and cooling media hype are 3 major bullish reasons to buy XRP this week.
However, the $0.58 area is a major reversal point. Although it’s unlikely within the current on-chain circumstance, but if the bears force a downswing below that territory, these 3 bullish indicators could be invalidated.