Recent financial maneuvers by Ripple Labs have caught the attention of crypto analysts once again. Data from crypto data analysis platform Whale Alert shows a significant movement of 800 million XRP tokens back into Ripple’s established escrow system. This comes after Ripple’s monthly unlocking of one billion XRP, which has been a regular occurrence since 2017 as part of the company’s strategy to maintain price stability.
The purpose of Ripple’s escrow mechanism is to ensure a consistent and predictable distribution of XRP to the market, counteracting any potential price volatility that may arise from a sudden influx of tokens. In 2017, Ripple pledged to gradually release 55 billion XRP in 55 monthly tranches of one billion each. Each month, Ripple typically returns a majority of the tokens, mainly 800 million XRP, back into the escrow, while retaining around 200 million XRP for market circulation. Recent data from Whale Alert confirms that Ripple did not deviate from this practice, locking 800 million XRP tokens back into the established escrow system.
It is worth noting that the return of the 800 million XRP tokens occurred in two equal transactions, each involving 400 million XRP. Analysis of the data reveals that the first batch of 400 million XRP was directed back into escrow from an address known as ‘Ripple 10,’ which had received the tokens from two different addresses, Ripple 22 and Ripple 23. The subsequent batch of 400 million XRP was then transacted from ‘Ripple 23’ to another address called ‘Ripple 11’ before being directed to the company’s escrow account. During these transactions, the market value of the re-locked 800 million XRP was approximately $480 million.
Out of the original one billion XRP made available, the remaining 200 million XRP, currently valued at about $121 million, was moved from Ripple 22 to Ripple 1. These funds are expected to be used for Ripple’s operational expenses and other business-related activities.
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With the recent return of 800 million XRP tokens, Ripple’s escrow holdings now total roughly 40.9 billion XRP. In comparison, their Q3 report disclosed that they had about 41.3 billion XRP in escrow at the end of September.
In terms of XRP price, it has been on a significant upward trend since breaking the 200-day Exponential Moving Average (EMA) line on October 21. Within just 11 days, the price increased by almost 20%. The recent pause in the price rally is not likely due to Ripple’s monthly transfer from escrow, as the XRP tokens do not immediately enter the market, and investors are aware of this happening on a monthly basis.
One possible explanation for the pause in the rally is that XRP encountered strong resistance at the 0.386 Fibonacci retracement level of $0.625, where the price was rejected in its first attempt to break through. However, if the price remains above the $0.60 level, the bulls may make another attempt, with the next short-term price target being the 0.5 Fibonacci retracement level at $0.683. On the other hand, if the XRP price is rejected again at $0.625, a retest of the 0.236 Fibonacci retracement level at $0.553 could be the next logical move.
This update on Ripple’s financial maneuvers and the overall XRP market performance illustrates the ongoing focus and attention on the cryptocurrency industry. As industry players like Ripple continue to navigate through various market dynamics, stakeholders and investors closely monitor their activities in anticipation of potential impacts on the markets.
