- Despite its conflict with the US SEC, the XRP coin found itself skyrocketing by over 45% on a weekly basis.
- It is believed that the XRP surge was caused by Asian traders, in fear of missing out (FOMO).
- Volumes of XRP pairs suggest that Chinese and Korean traders are buying the dip and raising the price.
Ripple Labs’ coin, XRP, recently started seeing a major price surge. The coin grew by over 45% on a weekly basis, even managing to overtake the fourth spot on the list of largest cryptos by market cap from Litecoin (LTC). The interesting part is that all of this was possible despite the US SEC lawsuit which knocked the coin’s price by 70% in late December 2020.
But, there might be a simple explanation for this behavior, as some have suggested that Asian retail traders might be responsible for it.
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Asian traders ‘buying the dip’
FOMO, or the Fear Of Missing Out, has always been a powerful drive for investors to buy even the coins that are obviously failing. What is happening to XRP right now is a perfect example, as Asian traders seem to be rushing to buy the coin, even though the SEC has confirmed that it views XRP as a security.
Swissquote Bank’s head of digital assets, Chris Thomas, commented on this by saying that traders often trade products on a relative value basis. In other words, when XRP price fell due to the SEC lawsuit, the traders found it cheap, and worth buying, believing that it will return to normal.
In doing so, they likely caused the XRP rally that truly did return it to normal, or at least, it helped it start the journey back up.
Korean and Chinese traders are the biggest XRP buyers
In essence, Asian traders have seen the entire crypto industry going up, while XRP went in the other direction. To them, that meant that the coin will follow sooner or later, and that buying it while it’s at the bottom is a great opportunity.
This appears to have been a popular thought, as numerous major exchanges in Asia saw massive amounts of XRP traffic. The most common pairs were XRP/USDT and XRP/KRW. However, XRP’s pairs against BTC and ETH saw surprisingly small volumes.
The use of KRW suggests that many in Korea are rushing to buy XRP, while the use of USDT — a stablecoin frequently used in China, suggests that this country’s users are also XRP believers.
In the West, however, XRP still finds itself in an unfavorable situation, with major exchanges about to unlist it due to the SEC incident.