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XRP Could “Go Down the Drain” Due to Massive Token Selling on DEX
A record surge in trading activity has been recorded on the native decentralized exchange XRP Ledger DEX.
The number of transactions executed by users of the platform reached 954,000 per day. This development has alarmed analysts at CryptoQuant, as previous spikes in transaction volume have often preceded a drop in XRP’s price.
Change in transaction volume on the decentralized exchange (blue line) vs. XRP price (black line)
There is a bearish divergence between user activity on the XRP network and the coin’s price.
Unlike in July, when a sharp rise in transactions led to price growth, in October XRP’s value dropped from $3 to around $2.3, according to CryptoQuant.
Given current market dynamics, analysts believe that the spike in transactions does not indicate accumulation, but rather suggests that:
- XRP is being sold off en masse;
- Whales are rebalancing their investment portfolios;
- Traders are closing long and short positions on the cryptocurrency.
On November 4, XRP’s price plunged to nearly $2, before recovering to around $2.35.
However, CryptoQuant analysts say the sell-off isn’t over yet, and it’s too early to bet on a market reversal.
Most likely, the downtrend will continue until XRP tests support near $1.9.
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