“The recent correction from the last two weeks of exuberance is healthy for the markets,” Max Shannon, senior associate at Bitwise Europe, told Decrypt.
On-chain data provides strong evidence for this contrarian trend.
A look at Santiment’s on-chain whale activity shows strong demand for both XRP and Cardano from large holders. The 50-day average of transactions worth $100,000 or more hit a five-month high for both cryptocurrencies in August.
Corroborating this bullish outlook is the increase in high-net-worth investors’ Cardano and XRP holdings over the past month, according to the platform.
XRP wallets holding 1 million to 10 million tokens added 300 million to their portfolio, bringing their total holdings to 6.72 billion as of August 18.
In the same period, ADA cohorts also accumulated 30 million tokens, bringing their total holdings to 5.55 billion.
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At current prices, these outsized XRP and Cardano additions are worth $900 million and $27.3 million, respectively.
XRP’s year-to-date return hovers around 15%, showcasing the token’s dominance. This strength is a result of the successful conclusion of the SEC vs. Ripple lawsuit and favorable regulatory developments.
“In recent months, XRP’s performance has been shaped by two opposing forces: regulatory clarity and renewed supply concerns due to the release of 1 billion XRP tokens from escrow,” John Murillo, Chief Business Officer of B2BROKER, told Decrypt.
The decline in the net taker volume, the difference between the taker buy and sell volumes, over the past four days, shows seller aggression is reducing. Still, XRP’s price has produced a lower low.
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“It signals that selling aggression is fading even as price trades lower – a classic bullish divergence,” Maarten Regterschot, Contributing CryptoQuant analyst, told Decrypt.
A similar signal spotted in late July and early August catalyzed a double-digit rally for the token, explained Regterschot.
Though Cardano’s year-to-date performance is -24%, it has started to pick up steam over the past week after Grayscale’s August 12 filing for a Cardano Trust ETF.
Its relative performance against Bitcoin hit a four-month high last week, indicating a potential altcoin season scenario, where profits from Bitcoin and Ethereum move into altcoins such as Cardano and XRP, giving rise to explosive trends.
