XRP marked an impressive bull run hitting two-year highs in the past few days. Now, an upcoming airdrop could support future earnings.
The third largest cryptocurrency by market cap comes in at $ 0,73
Traded around $ 0,70 at the time of writing, the world's third largest cryptocurrency by market value is up 130% from last Saturday's lows of around $ 0,30. Prices hit a high of $ 0,73 early Tuesday, the highest level since May 10, 2018 - here quotation in real time.
On-chain activity picked up the pace along with rising prices, with new account activations on XRP Ledger growing more than 200% to a record high of 5.562 over the past five days, according to the data source XRPScan.
Analysts associate the increase in the price of XRP and other parameters with the airdrop of the “spark” tokens of the Flare Network smart contract platform for XRP holders. The free distribution of 45 billion spark tokens, based on a snapshot of XRP addresses on December 12, is supported by the investment arm RippleX (formerly Xpring).
"The upcoming airdrop is overloading the XRP bull market and driving sharing mad within one of the largest crypto communities," according to Jehan Chu, managing partner of Hong Kong-based blockchain investment firm Kenetic Capital.
"With the upcoming launch of Flare, a fork of XRP for smart contracts, the pair will attempt to challenge Ethereum's dominance in decentralized finance and decentralized applications."
Flare integrates with the Ethereum virtual machine allowing the transfer of existing decentralized Ethereum applications (dapps) to Flare to serve the XRP ecosystem. Some of the major cryptocurrency exchanges, including South Korea's Bithumb and Luxembourg-based Bitstamp, have announced support for the token release.
Peak in XRP streams
XRP's foreign exchange flows increased in parallel with rising prices, suggesting greater selling pressure in the market. Nearly 2,3 billion XRP, worth nearly $ 1 billion, have been transferred to cryptocurrency exchanges since Saturday.
This is more than three times the average daily influx seen in 2019, according to blockchain analysis firm Chainalysis. Investors typically change their currencies when they want to liquidate their holdings, increasing supply in the market and taking direct custody of the coins when prices are expected to rise.
According to Chainalysis economist Philip Gradwell, rising inflows don't necessarily imply an imminent sell-off. "Demand has been strong so far, with average exchange intensity twice the average," Gradwell tweeted.
The average exchange intensity, which measures the number of times an incoming coin is traded, stood at 14 on Monday, significantly above the 365-day average of 5,8.
