In the wake of a recent market decline that caused many investors to withdraw from XRP, significant increases in holdings by large-scale investors, known as whales, have been observed. This trend suggests a potentially bullish outlook for the cryptocurrency. Two primary factors whale accumulation and the formation of a bull flag pattern are influencing predictions regarding XRP’s potential rise to $4.
Whale Accumulation in the XRP Ecosystem
Recent data from Santiment has highlighted that whales holding between 1 million and 10 million XRP tokens accumulated around 100 million XRP between December 7 and December 10. During this timeframe, a notable price drop of 27.2% was recorded, with XRP falling from $2.61 to $1.90.
Rather than selling during this downturn, these whales opted to capitalize on the lower prices to enhance their holdings. Their total balance increased from 4.71 billion XRP tokens to 4.80 billion, signifying an infusion of approximately $200 million into the market.
This accumulation is part of a larger trend observed over the past month. In mid-November, whale holdings were at 3.71 billion XRP, and by early December, this number had escalated to 4.8 billion, indicating that around 1.1 billion XRP tokens were acquired during this period. Simultaneously, XRP’s price rose from $0.50 to $2.87, underscoring the potential influence of whale activities on market dynamics.
Related Article: ADA Analyst Predicts Dogecoin Price Surge to $24
Although some profits were taken by whales when XRP peaked at $2.87 earlier this month, their holdings experienced another increase following a subsequent price drop. After the market crash on December 10, XRP showed signs of recovery, rebounding to $2.43.
Bull Flag Pattern and Market Predictions
Alongside whale activity, XRP’s price movements have been forming a bull flag pattern, which is commonly interpreted as a signal for a continuation of an upward trend. Nevertheless, certain technical indicators indicate a possible temporary correction before the projected breakout.
Prominent market analyst Ali Martinez shared insights on Twitter, noting that while XRP is indeed forming a bull flag, the TD Sequential indicator has issued a sell signal on the four-hour chart. “Based on this,” Martinez remarked, “XRP may encounter another correction prior to the anticipated breakout beyond the $2 price range.”
Martinez has forecasted that following a brief pullback, XRP could initiate a rally towards the $4 mark. He initially presented this possibility earlier in the week, identifying a fourth bullish pennant formation. Similar patterns have historically resulted in price increases from $0.69 to $1.10 and from $1.50 to $2.87.
