Friday, October 4, 2024
No menu items!
HomeTechnologyMassive Ripple Unlock Sends XRP Prices Spiraling Downward

Massive Ripple Unlock Sends XRP Prices Spiraling Downward

Ripple has unlocked 1 billion XRP tokens from escrow, sparking investor concerns as part of its ongoing plan to manage its token release. The sudden increase in supply led to an almost 3% price drop for XRP

Despite previous gains, the token’s price has now seen a setback, leaving traders anxious about future trends. Meanwhile, this is not the first time Ripple has made such a massive unlock. On-chain data revealed more details about the transaction.

Ripple Unlocks 1 Billion XRP Tokens

According to Whale Alert, Ripple unlocked 1 billion XRP tokens on October 1st. Three transactions unlocked the 1 billion tokens: 500 million, 400 million, and 100 million coins, together worth $621.76 million

Ripple has maintained 55 billion XRP tokens in escrow since 2017. Every month, the blockchain company unlocks 1 billion XRP to add predictability to the market. Last month, according to Wu Blockchain, Ripple unlocked 1 billion XRP tokens.

The escrows expire at the beginning of the month. But the XRP is still sitting in the expired escrow until someone (anyone) cancels it. Many escrows are split into multiple escrows that expire at the same time for administrative convenience.

— David “JoelKatz” Schwartz (@JoelKatz) February 25, 2024

However, not all of these tokens enter circulation immediately. Ripple’s Chief Technology Officer, David Schwartz, explained the process earlier this year via an X post.

He said, “The escrows expire at the beginning of the month. But the XRP is still sitting in the expired escrow until someone (anyone) cancels it.” 

Despite these measures, Schwartz has expressed uncertainty about the effectiveness of the escrow system, citing ongoing concerns.

Price Impact Following the Unlock

Following the unlock, XRP’s price fell by nearly 3%, trading around $0.629. The sharp decline occurred despite the token’s previous weekly gains of 7%. Moreover, the coin has sustained its 12.70% monthly gains.

In addition, XRP is trading above its 50-day SMA line. This level is now potential support that could prevent its price from falling.

Despite the price drop, recent reports indicate a bullish outlook for XRP. According to Santiment data shared by Ali Martinez, in the past 10 days, these whales have been accumulating more XRP tokens in their holdings.

#Ripple whales have bought over 470 million $XRP in the past 10 days! pic.twitter.com/8I3ZWF0cgO

— Ali (@ali_charts) September 29, 2024

The chart shows that wallets holding 100 million tokens have recently added over 470 million XRP to their portfolio.

Most of this buying happened when XRP was trading around $0.58, suggesting the whales saw it as a good opportunity to buy. This could help price positively in the long run.

Moreover, Ripple’s developments, including stablecoin projects and strategic partnerships, continue to bolster confidence. Some experts predict XRP could see a significant rally by the end of the year, possibly reaching $3. However, the recent price dip shows the market remains unpredictable.

Big things could be happening for $XRP soon!👀#XRPHolders https://t.co/XHAaVRwXwB pic.twitter.com/QM7ChskTNv

— Anup Dhungana (@CryptoAnup) September 29, 2024

In the meantime, XRP futures have also experienced a 7% decline, with the futures open interest (OI) dropping to $1 billion. The derivatives volume plummeted 53.92%, reflecting growing uncertainty among traders.

This recent token unlock raises questions about how Ripple’s strategy will affect the token’s future. While some market participants believe in XRP’s long-term potential, others worry that the increased supply may continue to pressure the token’s price.

Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.

Our Editorial Process

The Tech Report editorial policy is centered on providing helpful, accurate content that offers real value to our readers. We only work with experienced writers who have specific knowledge in the topics they cover, including latest developments in technology, online privacy, cryptocurrencies, software, and more. Our editorial policy ensures that each topic is researched and curated by our in-house editors. We maintain rigorous journalistic standards, and every article is 100% written by real authors.

Read More

RELATED ARTICLES

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Recent Comments