On September 22nd, a significant transfer of 120 million XRP tokens occurred, with the funds being moved from the Bithumb exchange to an unnamed wallet. What does this mean? Is it bullish or bearish?
XRP On-Chain Transfer Information, Source: WHALE ALERT.
The mentioned transfer represents an on-chain data change that reflects a shift in fund movement. Generally, there are four types of transfers, each with different implications or impacts:
Types of On-Chain Transfers, Source: Compiled by Mitrade.
This transfer of 120 million XRP tokens from an exchange to a wallet suggests that investors have a weak desire to sell and may be accumulating for long-term holding, reducing the XRP supply and decreasing selling pressure in the market. Therefore, it can be considered bullish.
Although this suggests a positive outlook, the price of XRP today did not show a significant increase. This is mainly due to the current circulating supply of XRP being 53 billion coins, and the reduction of 120 million coins only accounts for 0.2% of the total supply. In other words, the lack of funds available prevents a substantial price boost.
XRP Daily Price Chart, Source: TradingView.
Despite the lack of a notable price surge, it can be inferred that funds are being allocated to accumulate XRP, making it worthwhile to follow from a market-making perspective. Furthermore, the upward trend line for XRP remains intact, and the price is at a low point, making it a favorable buying opportunity for both short-term and long-term positions.
XRP Daily Price Chart, Source: TradingView.
For long-term positions, it is advisable to continue buying as the price is relatively low. For short-term positions, entering at this level provides a high risk-reward ratio, as the potential for price increase outweighs the downside. However, it is crucial to set strict stop-loss orders if the price falls below $0.4 to manage the risk effectively.
