XRP has eclipsed Bitcoin as the most traded asset on the South Korean exchange Bithumb. Meanwhile, the altcoin is facing slight capitulation as most assets are trading for profit. However, Santiment reveals that this indicates that XRP is more likely to rally.
XRP is the most popular crypto on South Korea’s Bithumb
XRP, the sixth largest cryptocurrency by market capitalization, has eclipsed Bitcoin as the most traded asset on South Korean exchange Bithumb. XRP has surpassed Bitcoin in terms of trading volume on Bithumb, one of South Korea’s largest crypto exchanges. On the Bithumb exchange, the XRP/KRW trading pair made up 17.85% of all volumes, with a total of $30,818,226. Thus, it became the most traded asset, surpassing Bitcoin (BTC).
Kaiko, a crypto research firm, is trying to unravel the reason for XRP’s dominance and popularity on Korean crypto exchanges, which has surpassed Bitcoin. In an analysis published at the beginning of June, Kaiko stated that Korean crypto markets have a very unique market structure. This is because traders prefer altcoins over BTC and ETH as main assets. Kaiko went on to say that XRP is the most traded altcoin to date (YTD).
A signal showing the possibility of a price rally for the altcoin
The bears pushed XRP away from the $0.50 psychological zone as it failed to capitalize on the recent market rally. In the midst of this situation, some XRP investors resorted to capitulation, raising concerns among market participants. However, a recent report from behavioral analytics resource Santiment suggests that this trend indicates that XRP is more likely to stage a price rally than most assets.
🤑 As #crypto's largest assets are ranging to start the week, $XRP is showing a slight #bullish sign due to mild trader capitulation. Historically, coins moving at a greater ratio at a loss compared to profit have a higher likelihood of rising in value. https://t.co/6pul5oxUsd pic.twitter.com/pM92pdxEli
— Santiment (@santimentfeed) June 26, 2023
The Santiment report considers the “On-Chain Transaction Volume Ratio in Profit/Loss” metric for this analysis. This indicator shows that trades involving most assets across the market are leaning towards the profit-taking zone. The metrics (ratio) of these assets show positive values. This indicates that most investors are making a profit. Specifically, Bitcoin (BTC) has a rate of 0.315, Ethereum (ETH) has a rate of 0.407, Litecoin (LTC) has a rate of 0.128 and Cardano (ADA) has a rate of 0.030.
In contrast, XRP witnesses a rate of -0.267. This shows that most investors are witnessing losses in their XRP transactions. Santiment says it’s a “slight bullish sign” despite the worries triggered. According to the behavioral analytics platform, historical data shows that when a crypto-asset faces a period of losses and there are more on-chain transactions that result in losses, it is usually followed by the next price rally.
What does XRP historical data show?
Researches of experts also historically confirm these claims of Santiment. A closer look at the “XRP Ratio On-Chain Trading Volume at Profit/Loss” metric shows an increase in trading at a loss before the price increases in January and March.
Source: SantimentThe metric fell as low as -0.700 on January 1. This drop came just before a price rally where XRP reclaimed $0.4330 on January 23. Similarly, the indicator dropped to -0.1743 on March 11. This drop started the XRP March rally. XRP finally rose to $0.5850 on March 29.
The rationale behind this trend is that when a crypto asset has a higher ratio of losses to profits, weak hands or less faithful investors surrender or sell their holdings due to market turbulence. When these weaker participants withdraw or exit the market, supply pressure is relieved. This creates an environment that potentially allows the price to recover.
Meanwhile, XRP is trading as low as $0.4734 at press time. XRP’s downtrend emerged after the drop from the $0.5272 high on June 22. As you follow on Kriptokoin.com, the altcoin continues to lose since then.
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