Because investors had been scrambling to buy XRP in order to lay claim to a corresponding amount of Spark tokens, the altcoin had its most significant bullish breakout in years.
Ripple network activity post-Flare airdrop suggests that the asset has fundamentally lost its spark, but technicals might on the flipside suggest that the spark was enough to light the fuse, and the first wave is just the beginning of the full explosion to come.
Post-Flare Airdrop Ripple Effect Leaves Network Activity At Monthly-Low Levels
The third-ranked cryptocurrency by market cap appears to be in its own world and market cycle when it comes to the crypto space.
XRP missed the Summer’s altcoin season and was unaffected by last year’s bullish Bitcoin. The altcoin remained so stagnant for so long, it was the worst-performing asset three years running and performed so poorly Ripple was forced to buy back a portion of the supply to reignite interest.
Related Reading | Underdog Story: Why XRP Could Soon Outperform Bitcoin And Ethereum
The tactic failed, but the spark necessary for the breakout arrived with the Flare Network airdrop and the issuance of Spark tokens to anyone holding XRP at the time of a blockchain snapshot.
The allure of free Spark tokens caused a massive breakout in XRP and an over 200% rally from start to finish. But after the snapshot date of December 12, Ripple protocol activity fell off a cliff, and the price per XRP followed.
Ripple protocol activity fell off a cliff post-Flare airdrop | Source: Santiment.com
How Spark Tokens Might Have Lit The XRP Bull Market Fuse
Ripple network activity indeed dropped to monthly lows, according to blockchain analysis firm Santiment. As soon as the Spark snapshot was over, so was the spark that ignited the rally. Or was it?
While things might be slowing down for XRP fundamentally, technicals suggest that a monstrous rally is just beginning thanks to the fuse being lit by Flare Network’s new coin on the block.
Related Reading | The Ripple Effect: 5 Key Factors Behind The 100% XRP Surge
XRPUSD has flipped bear market resistance as support, holding above a high point set in 2017.
The bullish breakout also has registered on the Average Directional Index with a sharp increase and rise over the key level of 20. ADX reading of 20 or higher suggests a trend is strong, and passing above 20 initially indicates that the trend has just started.
The Average Directional Index says the bull trend is only beginning | Source: XRPUSD on TradingView.com
During the last cycle, two impulses arrived closely packed together. The green DMI+ line spiked upward, then another time before the ADX passed through the bullish indicator. After nearly nine months of consolidation, Ripple reached for the stars one more time, setting its peak price at over $3 in early 2018.
If history repeats, the Spark token lit the fuse for bullish impulse one of three, with the second arriving any day now. The third and final impulse, which is the most profitable of all, could be another year away.
Featured image from Deposit Photos, Charts from TradingView.com