What It Means For Price
On-chain data shows that XRP Binance Netflow has surged into positive territory recently. What this could mean for asset prices.
XRP investors have been depositing money into Binance lately
As one analyst explains in CryptoQuant Quicktake postalRecently, a large number of XRP deposit transactions have flowed to Binance. The correlation on-chain indicator here is “exchange network traffic,” which tracks net transfers to and from a given centralized exchange.
The traditional form of this indicator measures the difference between inflows and outflows to the platform, but in the context of the current topic, different versions of this indicator are of interest: an indicator that calculates the net number of deposit/withdrawal transactions.
When the indicator value is positive, it means that more incoming transfers than outgoing transfers occur on the exchange. Since one of the main reasons investors deposit money into these platforms is for sale-related purposes, this trend could be detrimental to XRP.
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On the other hand, a negative value for this indicator means that withdrawals dominate the exchange. This trend may indicate that holders are interested in holder This will naturally have a bullish impact on prices in the long term.
Now, the chart below shows the 30-day moving average (MA) trend of Binance XRP exchange net flows over the past few years:
As you can see from the chart above, Binance’s net XRP trading flows have mostly remained in positive territory over the past two years, indicating that investors have been making withdrawals.
Recently, however, the indicator seems to have deviated from the norm as it has seen a sharp positive increase in value. The asset has surged over 54% over the past week, so deposit traders may be looking to sell and realize profits.
The main question now is, does this sell-off pose a potential threat to XRP’s value? The indicator currently sits at 470, which indicates significantly more inflows than outflows. Considering that this is only the 30-day moving average, the peak is bound to be higher.
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While such large inflow trading may seem like a danger at first glance, it may not actually be so, as the activity it corresponds to comes primarily from retail investors.
whale Not many transactions are left as they prefer to move large amounts of money in a single transaction. So every time this version of the exchange’s net flow spikes, it’s a sign that small holders are making deposits.
Of course, there could still be some whale movement within these inflows, which does eventually have a negative impact on XRP price. Which scenario holds true, however, remains to be seen.
Ripple price
XRP has surged over the past week, ahead of the rest of the market, and its price has risen to $1.09.
Featured images from Dall-E, CryptoQuant.com, charts from TradingView.com
