The popularity of 1inch, a centralized exchange platform, marked an unprecedented surge as the number of 1INCH tokens held in wallets associated with the platform rose to a staggering 184.28 million ($65 million). The analytics firm Glassnode noted this as a 50% increase in a mere span of three days. This accumulating number makes up 18.65% of the total circulating supply of 987.6 million and 12.2% of the net supply of 1.5 billion.
Ordinarily, the relocation of coins to exchanges is an indication of intended coin selling or a step towards trading derivatives using these tokens as margin. Understanding this, the sharp rise in the balance held in exchange wallets could be seen as an early warning of imminent price volatility.
On Tuesday, 1INCH tokens saw a downtrend, falling by 10% to 36 cents- the worst single-day (UTC) decline since June 10. The decline stands at 18% for the week, with the cryptocurrency valued at 35 cents at the time of writing. This recent downward shift has effectively reversed most of the token’s prior upward movement, which had taken it from 30 cents to nearly 60 cents in the week leading up to July 16.
Analysts argue that this likely price drop could be due to profit-taking by a “whale” – an individual or organization with a large enough share of the asset that their selling could influence market prices. Prithvir Jhaveri, CEO of Loch Research confirmed this theory. On Tuesday, he tweeted that the “whale” who started the 1INCH price pump reduced his holdings to 91million tokens, notably less than before the price pump. Furthermore, general market trends saw a struggling crypto lender Celsius move more than a million’s worth of ZRX, 1INCH and Tether’s gold-pegged stablecoin XAUT to FalconX, an institutional crypto exchange.
While such shifts could translate to price volatility in the short term, they also present potential benefits, such as liquidity and asset diversity. Observers and enthusiasts should be watchful for further developments in the crypto market, but should also approach such fluctuations with a fair degree of caution.
Source: Coindesk
