One company leveraged the TWAP strategy to accumulate approximately $7 million worth of XRP across thousands of buy orders on Coinbase.
Dom Furst, market analyst and order book expert called for caution In a recent post on X, we discussed this interesting market movement. In particular, while millions of dollars worth of XRP purchases usually dominate exchanges from time to time and do not arouse any suspicions, recent purchase orders caught the attention of market observers due to the way they were executed.
Business uses TWAP to purchase approximately $7 million in XRP
Specifically, Dom confirmed that the trader did the following: turned on some some kind of Time-weighted average price (TWAP) trading algorithm of Coinbase’s XRP. He highlighted the XRP incident shortly after calling attention to an early TWAP that accumulated 30,000 Ethereum (ETH) in an hour on Binance.
Importantly, the goal is to obtain an average price that is close to the typical price in the market during that period. This approach helps traders, especially institutional investors, to buy and sell in a stable manner without causing sudden price fluctuations.
Effects of the TWAP instruction
The data in the attached chart shared by Dom shows the $6.8 million in purchases spread across 4,287 buy orders. large scale Coinbase’s impact on XRP Cumulative Volume Delta (CVD). Specifically, CVD measures the difference between cumulative buy and sell orders on an exchange.
This large purchase caused a rapid rise in Coinbase CVD from 11:00 am to 11:45 am on October 31st, pushing the indicator to nearly 14 million XRP. Interestingly, the CVD of other cryptocurrency exchanges such as Binance, Bybit, OKX, Upbit, and Kraken remained between -2 million and 2 million XRP within this period.
This development also had a visible impact on the XRP price on Coinbase. Specifically, while XRP was trading around $2.545 on other exchanges, it rose to $2.555 on Coinbase, pushing up the Coinbase premium.
Remarkably, this is consistent with recent comments. vincent van cordLast month, he suggested that a single $15 million buy order could push the price to $15 by leveraging available XRP reserves on Binance’s order book. As Dom pointed out, the latest TWAP orders are worth nearly $7 million and are aimed at avoiding such large price movements.
