XRP has chalked up an impressive rally to two-year highs in the last few days, and a coming airdrop may be driving the gains.

Trading around $0.70 at the time of writing, the world's third-largest cryptocurrency by market value is up 130% from lows near $0.30 seen on Saturday. Prices reached a high of $0.79 earlier on Tuesday, the highest level since May 10, 2018, according to the CoinDesk 20.

On-chain activity has picked up the pace alongside the price rally, with the new account activations on the XRP Ledger rising more than 200% to a record high of 5,562 in the past five days, according to data source XRPScan.

Analysts are associating the surge in XRP's price and other metrics with the smart contract platform Flare Network's airdrop of "spark" tokens to XRP holders.

The free distribution of 45 billion spark tokens, based on a snapshot of XRP addresses on Dec. 12, is supported by Ripple’s investment arm RippleX (formerly Xpring).

"The impending airdrop is supercharging the XRP bull market and whipping mindshare of one of the largest crypto communities into a frenzy," according to Jehan Chu, a managing partner at Hong Kong-based blockchain investment firm Kenetic Capital. "With the imminent launch of Flare, a smart contract utility fork of XRP, the pair will attempt to challenge Ethereum’s dominance in decentralized finance and decentralized applications."

Flare integrates with Ethereum's Virtual Machine, allowing existing Ethereum decentralized applications (dapps) to be ported over to Flare to serve the XRP ecosystem.

Some of the major cryptocurrency exchanges, including South Korea's Bithumb and Luxembourg-based Bitstamp, have announced support for the token drop.

Exchange inflows of XRP have soared alongside the price rally, suggesting increased selling pressure in the market.

Nearly 2.3 billion XRP, worth nearly $1 billion, have been transferred to cryptocurrency exchanges since Saturday. That's more than three times the average daily inflow seen in 2019, according to blockchain intelligence firm Chainalysis.

Investors typically transfer coins to exchanges when they want to liquidate their holdings, boosting supply in the market, and take direct custody of coins when prices are expected to rally.

According to Chainalysis economist Philip Gradwell, the inflow rise doesn't necessarily imply an imminent sell-off.

Also read: XRP Rises More Than 30% as Altcoins Piggyback on Bitcoin's Wave

"Demand has been strong so far, with median trade intensity twice the average," Gradwell tweeted. Median trade intensity, which measures the number of times an inflowing coin is traded, stood at 14 on Monday – significantly higher than its 365-day average of 5.8.