Price of XRP crashes following snapshot for Spark airdrop

Price of XRP crashes following snapshot for Spark airdrop

Image of a flare

The snapshot for the upcoming airdrop of Flare’s native token Spark took place at midnight on Saturday

Flare is a distributed network that can be used to create two-way bridges between networks, such as Ethereum and the XRP Ledger (XRPL), a global payment and foreign exchange network. Flare uses the Avalanche consensus mechanism and is the world’s first Turing complete Federated Byzantine Agreement (FBA) network. This basically means that Flare doesn’t rely on economic mechanisms like Proof of Stake (PoS) to maintain network security.

The native token of the Flare network is called Spark (FLR), and can be used to prevent spam attacks, participate in protocol governance, provide data to an on-chain oracle and as collateral within decentralised applications (Dapps).

Flare announced earlier this year that 45 billion Spark tokens would be airdropped to XRP holders, excluding Ripple Labs, at a ratio of approximately 1:1. More than 100 exchanges and wallets are participating in the airdrop, including Binance, Bithumb, Bitfinex, Exodus and Ledger. Coinbase also eventually announced their support a week ago.

The distribution of Spark tokens will be based on XRP balances at the time of the snapshot, which was taken at 00:00 am UTC on 12 December – a date chosen to commemorate the birth of Martha Coston who invented a flare and signalling system, and after whom Flare’s testnet is named.

Following the snapshot, the price of XRP crashed, likely due to many people who had held it just to benefit from the airdrop selling it immediately. Indeed, on-chain analytics platform Santiment tweeted on Friday that the number of XRP addresses holding more than 10 million tokens had risen to an all-time high on the eve of the snapshot.

In the 15 hours following midnight on Saturday, the price of XRP fell by around 15% on Coinbase from $0.5718 to $0.4857. The price has steadied somewhat since and could benefit longer term as Flare’s upcoming utility fork is intended to bring value back to the original chain. Flare will bring smart contracts to XRPL, as well as the feasibility to create a trustless pipeline to other blockchains.

Self-custody XRP holders can still claim Spark up to the deadline of 11 June 2021, after which any unclaimed Spark will be burned. The airdropped tokens will be distributed when the Flare Network goes live, which is expected sometime within the first and second quarter of 2021.

Push towards all-time highs expected from eager bulls

Image of a physical Bitcoin in front of a chart

Bitcoin (BTC) has regained its pre-downturn highs as weekend trading brought its price as high as $19,400

The largest cryptocurrency by market capitalisation has spent the weekend moving upwards as it created a sharp ascending channel, with its price reaching as high as $19,400. As moving within this channel was unsustainable, Bitcoin stepped out of it and started trading sideways just above the $19,100 support level.

As Bitcoin regained most of the value lost from its recent downturn, its outlook is extremely bullish, with a strong push towards new all-time highs very much expected. When taking a look at its week-over-week performance, Bitcoin has ended up in the green, posting a 2.80% gain and slightly outperforming ETH’s 1.97% gain. On the other hand, XRP has lost a whopping $13.11% in the same period.

At the time of writing, BTC is trading for $19,150, over 4.22% in the green on the monthly chart.

BTC/USD

Bitcoin bulls entered the market late Friday and created a strong ascending channel that pushed price from $17,600 all the way up to $19,400. This move has proven the supportive strength of the 23.6% large Fib retracement, sitting at $17,875. However, trading within this newly-created channel was unsustainable, and the largest cryptocurrency had to step out of it, officially beginning its consolidation phase.

As the most recent push to the upside changed the sentiment around Bitcoin from slightly bearish to extremely bullish, a move towards the upside and a possible retesting of the all-time highs can be considered the most likely option. However, traders have to keep in mind the sheer strength of the resistance zone near the psychological $20,000 level.
BTC/USD daily price chart. Source: TradingView

The technical picture shows that the RSI indicator is mostly flat on the daily chart, and is sitting near the 60 mark. Investors might be more interested in the Hash Ribbons indicator, which posted a buy signal on 3 December.

As mentioned above, Bitcoin’s bullish sentiment will most likely propel prices to near all-time highs, but passing the $20k mark will require a great deal of buying pressure. In case Bitcoin manages to pass $20k with confidence, the next resistance level is expected to be around $20,750. On the other hand, if BTC fails to break the zone around $20k, traders may expect it to retest the area near $18k.

BTC/USD 1-hour chart. Source: TradingView

When taking a look at the hourly time-frame, we can see that Bitcoin has left its ascending channel and has started consolidating around the $19,100 mark. This support level has held up great so far, and falling below it is possible, but very unlikely. If, however, Bitcoin manages to drop below $19,100, its price will face support first at the next Fib retracement, sitting at $18,600, and then within a zone bound by $18,190 and $18,450.

Bitcoin’s immediate upside is guarded by the 2017 high of $19,666, which is also the bottom line of the high resistance zone. This zone extends to the psychological level of $20,000.