Ripple, a leading blockchain company, recently executed its monthly release plan by unlocking an additional 1 billion XRP tokens from escrow. This move is part of Ripple’s strategy to ensure a sufficient supply of XRP in the cryptocurrency market for cross-border transactions. However, the sudden increase in supply can have a short-term negative impact on XRP’s value.
On September 1, Whale Alert reported that Ripple unlocked one billion XRP tokens in four separate transactions. The first transaction involved the unlocking of 300 million XRP valued at $153 million, followed by an additional 100 million XRP valued at $51 million. The remaining 200 million and 400 million XRP tokens were unlocked in the last two transactions, totaling over $300 million. This combined movement of XRP exceeded the $500 million mark.
Following the unlock, a significant XRP holder transferred 19.92 million XRP, worth over $10 million, to the Binance cryptocurrency exchange. This reflects significant market activity and highlights the liquidity demand for XRP.
It is worth noting that XRP unlocks often lead to a decrease in price due to the increased supply of the cryptocurrency. However, Ripple must ensure liquidity to meet the high demand from businesses, partners, and exchanges. Despite the short-term impact on price, XRP maintains its position as the fifth-largest cryptocurrency in market capitalization.
Ripple’s recent legal victory over the SEC has further boosted investor interest in XRP. The cryptocurrency community eagerly awaited further communication from Ripple as the company prepared to celebrate its legal victory with an event in New York City on September 29.
The recent XRP unlocks play a crucial role in determining its price movement. Analysis suggests that an ascending triangle pattern on the four-hour chart indicates a potential 12 percent breakout, targeting a price of $0.6. However, achieving this upward movement requires sufficient liquidity, initially pushing the price to $0.55 and then toward the $0.6 mark. The one billion XRP tokens unlocked by Ripple will contribute to this liquidity boost.
Amid a broader market correction, XRP has experienced a 3.53 percent decline in the past 24 hours. Following its surge to $0.5496 on August 29, XRP has continuously declined and currently trades at $0.5075, witnessing a 7.4 percent drop from its peak. It has recorded losses for two consecutive trading sessions in the past two days.
It is essential to understand that XRP’s bearish performance is not an isolated occurrence, as the entire cryptocurrency market is currently facing a correction. Bitcoin, the leading cryptocurrency, has seen a 4 percent decline in the last 24 hours, and the overall cryptocurrency market has experienced a 3.68 percent decrease in its total valuation.
In conclusion, Ripple’s monthly release of 1 billion XRP tokens aims to ensure a sufficient supply of the cryptocurrency in the market. While this strategy may have a short-term negative impact on XRP’s value, it is essential for meeting the liquidity demands of businesses, partners, and exchanges. XRP’s recent price decline is part of a broader market correction, and the cryptocurrency community awaits further updates from Ripple after its legal victory against the SEC.
