Outside Source
Data suggests traders in Korea played a big role in buying the XRP dip below $2.
Market Analysis
XRP (XRP) price has maintained a position above $2 this week, thanks to traders bidding on the altcoin during the recent correction. Investors on the Korean exchange Upbit, and Bybit took advantage of the crash, accumulating significantly as indicated by the rising CVD value.
XRP CVD chart for Bybit during the Feb. 3 crash. Source: X.com
Traders swapped ETH for BTC and XRP as markets crashed
XRP was one of the crypto assets that dropped significantly during the recent correction, flashing a low of $1.78 on Feb. 3 from a high of $3.08 on Feb. 1. However, the altcoin managed to close firmly above the psychological level of $2. An anonymous market analyst, ltrd, pointed out that Korean traders were potentially responsible for XRP’s swift recovery.
In an X post, the analyst explained that Korean investors were “aggressively” buying XRP and BTC while dumping their ETH bag during the sell-off. The analyst added,
“Even more interesting is that they did so consistently over the entire period, not just at a specific moment—they were actively swapping ETH for BTC and XRP.”
XRP CVD buys on Upbit. Source: X.com
Under closer observation, it can also be implied that a majority of buy bids were positioned under $2 since the cumulative volume delta (CVD, the net sum of buy and sell volume) registered a sharp increase during 2:00-3:00 UTC on Feb. 3. XRP dropped down $1.78 before closing above $2.15 during the same hour.
While Asian spot buys might have kept XRP above $2 at the moment, data from CryptoQuant hinted that XRP whales might be selling a part of their bags.
Whale to Exchange transactions on Binance. Source: CrypytoQuant
More than 15,008 transactions occurred over the past day, with whales moving more than 180 million XRP tokens to Binance. This is the largest number of transactions taking place from whales to exchanges since Jan. 8.
Related: XRP price analysts bullish on $5 next, long-term target of $18
XRP open interest drops 44% in February
While spot traders took advantage of the opportunity, a 42% flash crash wiped out a significant portion of XRP futures open interest (OI). As illustrated in the chart, XRP OI tanked by 44% in February, dropping down to $3.55 billion from a high of $6.35 billion on Feb. 1.
XRP aggregated open interest, funding rate, and spot volume.
The aggregated XRP open interest across all exchanges dropped down to November 2024 lows, indicating a complete flush of leverage positions over the past three months. The funding rate has also been reset, implying that most traders are currently sidelined.
XRP 1-hour chart. Source: Cointelegraph/TradingView
From a technical perspective, XRP continued to thread lower within a descending channel pattern, with both 50-day and 100-day EMA acting as overhead resistance. The altcoin is set to retest the daily order block, which could potentially be buyers’ first area of interest, as there is long-term demand between $2.20 and $2.33.
Price reaction will be key in this region, as it may determine either a reversal or bearish continuation for the altcoin, possibly opening up another $2 retest over the course of February.
Related: 71% of institutional traders have ‘no plans’ for crypto: JPMorgan survey
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
This article first appeared at Cointelegraph.com News
