There were concerns that Korean traders were pumping and dumping XRP
XRP has seen tremendous price increases recently, with a 14% spike in the previous week alone. This represents an increase of more than 40% in the asset’s price in the last 30 days, making it the cryptocurrency with the biggest price increase in the market in the last seven days.
Around this time, XRP jumped from $0.44 to $0.54, partly due to increased trading on South Korean cryptocurrency exchanges, particularly Korbit and Bithumb, where XRP was the most traded crypto asset in the previous 24 hours. This upward trend has been related to greater investor confidence in the context of the present SEC litigation.
XRP/USD 4-hour chart | Source: TradingView
At the time of writing, Ripple’s native token is changing hands at $0.5122. This slight correction is in response to the overall crypto market, which is currently in the red zone. The next resistance level is $0.55, while support levels are $0.45 and $0.40, respectively.
The spectacular rise of XRP price has been one of the main talking points in the crypto industry in recent weeks. Ripple Labs, embroiled in a two-year-long legal battle, saw the price of its native token rise 15% in the previous seven days and nearly 16% from a month ago.
Surprisingly, there is a lot of activity in South Korean crypto markets. Within the last 24 hours. XRP was the fourth most traded asset on Upbit, the country’s largest exchange, accounting for more than 6% of overall trading activity. XRP’s market share was around 28% a few days ago, beating cryptos with greater market caps like Bitcoin and Ethereum.
Nonetheless, it accounted for a stunning 22% of the total volume on Bithumb, another significant exchange. South Korean exchanges have historically seen greater prices for popular tokens than overseas markets. This phenomena is known as Kimchi Premium, and it is fueled by the country’s high desire for cryptocurrency.
While this can be advantageous for arbitrage trading, South Korea’s strong capital restrictions, which limit the flow of money that can leave the nation, make it difficult and unprofitable.
To that end, Koreans have been known to engage in various activities, including promoting their products. The Head of the blockchain analytics firm CryptoQuant recently noted this.
Fun Fact 1.
This pumping & dumping happens in top Korean exchanges whenever they suspend withdrawals. pic.twitter.com/OklgG9RRdY
— Ki Young Ju (@ki_young_ju) December 22, 2021
Wash trading, a type of market manipulation in which traders buy and sell the same item to inflate trading volumes and create the illusion of liquidity accounts for a large portion of this.
When the price has risen dramatically. Traders then sell their positions, causing prices to decline. In this case, XRP’s price fell 8% until press time after reaching a five-month high on March 29.
Meanwhile, due to the recent gain, XRP’s MVRV Ratio reached a six-month high on March 29 but then fell. The increasing MVRV Long/Short Differential suggested that long-term bulls profited if they sold their tokens.
As previously stated, the price of XRP fell from its peak on March 29. According to Coinglass, the number of long positions placed for the coin has progressively declined since then, and the Longs/Shorts Ratio has dipped below one at press time.
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