Trader wins $233K betting on XRP’s 5% drop on Polymarket

A single trader exploited thin weekend liquidity to rack up $233,000 from Polymarket on an XRP contract, as the token slid down by almost 5% over the weekend.

XRP has declined about 3.83% over the last 24 hours, tracking losses in Bitcoin, which fell roughly 2.07%, and Ethereum, which fell 2.97%. In the last two days, XRP has shed 4.8% of its value, taking its spot price to as low as $1.95 and leaving the market in a “fragile” state.

Polymarket user counts $200k profit in weekend liquidity crunch

A Polymarket account using the pseudonymous handle @a4385 executed a precisely timed spot trade on Binance to take advantage of the muted price swings on Saturday. Crypto markets mostly have reduced trading volumes and low liquidity outside weekdays.

In a long thread on X by PredictTrader, explaining how the prediction market user snipped $200,000 in profits, a4385 invested in a Polymarket contract asking whether XRP’s price would fall between 12:45 PM ET and 1:00 PM ET on January 17. 

The Polymarket user’s counterparties were several automated trading bots, encouraged by solo developers who deployed them to provide liquidity. They place buy and sell orders based on probabilistic pricing models and arbitrage relationships in crypto markets.

When the price of “UP” shares was rising, XRP slipped about 0.3% during the early minutes of the contract, and the automated systems continued selling “UP” shares at high pricing. By the tenth minute of trading, “UP” shares had been pushed to around 70 cents, despite the underlying token moving exclusively in the opposite direction. 

The bots’ programming dictated that higher prices should attract more sales, which is exactly what helped the trader take up a dominant position. a4385 had approximately 77,000 “UP” shares with an average acquisition price of 48 cents per share, well below the $1 payout that would apply if the contract settled in favor of an upward move.

XRP was still trading lower. The “UP” shares would have expired worthless without a last-minute reversal. Two minutes before the Polymarket expired, a Binance wallet linked to the trader made a $1 million spot purchase of XRP. This pushing the token’s price up by 0.5%, according to data tracked by PredictTrader. 

The Polymarket contract resolved in favor of an upward price change and a redemption at $1 each, which doubled the trader’s average entry cost. a4385 unwound the XRP spot position and sold coins back into the market, causing a slump again. 

Data compiled by PolymarketHistory shows the entire operation cost $6,200 after accounting for slippage and execution effects, but the redemption of “UP” shares generated about $233,000 in profit.

“Some bots were shut down in time. Others didn’t react fast enough and lost their entire balances, including @aleksandmoney, which gave up a full year of profits,” PredictTrader wrote on X.

XRP is trading in the red zone

XRP’s price action is still constrained within a narrow range, with its latest high observed near $2.0834, while the most recent low sat around $1.95. At the time of this reporting, XRP was trading at $1.98, just above that lower boundary.

Together with Bitcoin and Ethereum, Ripple’s token has a slightly bearish sentiment, in conflict with short-term flashes of an intermittent buying interest. XRP is struggling to sustain a push above the $2.1 resistance level, unless a stronger charge by bulls moves it past $2. Any sustained close below that price mark would help bears scratch away every price momentum down to a downside target of $1.8.

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