The Increase in Exchange Balance and its Impact on 1INCH Price
The balance held in wallets tied to centralized exchanges has experienced a significant surge of 50% in just three days, according to data from Glassnode. This increase in exchange balance has particularly impacted the 1INCH token, with the number of tokens held in exchange wallets reaching a record high of over 184.28 million ($65 million). This represents 18.65% of the circulating supply and 12.2% of the total supply of 1.5 billion tokens.
Key Points:
- The balance held in wallets tied to centralized exchanges has increased by 50% in three days.
- 1INCH tokens held in exchange wallets reached a record high of over 184.28 million.
- Exchange balance represents 18.65% of the circulating supply and 12.2% of the total supply of 1.5 billion tokens.
- An increase in exchange balance is often seen as a precursor of price volatility.
- 1INCH experienced a 10% decline on Tuesday, its largest single-day decline since June 10.
When investors intend to sell or use coins for trading derivatives, they typically move them to exchanges. Therefore, a notable increase in the balance held in exchange wallets is often seen as a sign of potential price volatility. The recent surge in exchange balance has had a negative impact on the price of 1INCH, as it fell by 10% to 36 cents on Tuesday. This decline reverses most of the token’s previous surge from 30 cents to nearly 60 cents observed in the previous week.
Prithvir Jhaveri’s Insight
According to Prithvir Jhaveri, the co-founder and CEO of Loch Research, one of the factors contributing to the price drop is profit taking by a whale. The whale responsible for initiating the price pump decreased their holdings to 91 million tokens, which is less than what they held prior to the pump. Jhaveri also mentioned that the whale sold at the peak along with Celsius selling.
On Monday, Celsius, a bankrupt crypto lender, moved a significant amount of ZRX, 1INCH, and Tether’s gold-pegged stablecoin XAUT to institutional crypto exchange FalconX. This move potentially indicates the liquidation of these assets in exchange for bitcoin and ether.
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