Ripple’s 500 Million XRP Escrow Unlock Threatens Price As Bulls Struggle To Hold $0.61
XRP has struggled to a higher degree compared to the others in the top 10 cryptocurrencies by market cap and it seems like the bearish sentiment is far from over. Ripple just unlocked a massive amount of tokens from escrow, which could threaten the price further.
Ripple Unlocks 500 Million XRP
In the early hours of Friday, on-chain whale tracking platform Whale Alert posted two transactions carrying a notable number of XRP tokens. The first transaction saw 200 million tokens unlocked from the escrow wallet, worth $122.63 million at the time of the transfer.
The second transaction came minutes later when a total of 300 million XRP tokens were also unclosed from escrow. This second tranche of tokens, being larger than the first, was worth $183.89 million at the time, bringing the total number of unlocked tokens to 500 million. Together, both transactions were worth over $300 million.
These unlocks have, unsurprisingly, stirred concern in the Ripple community for a number of reasons. One of the reasons is that Ripple never does unlocks in the middle of the month. Rather, they do scheduled unlocks at the start of each month. So, these transactions have drawn the attention of the crypto community.
Another cause for concern is the fact that Ripple could be selling these XRP tokens. Hence, putting more tokens in circulation and adding more selling pressure to the already struggling digital asset. However, Ripple has not shown any indication of what these unlocks could be for as there have been no transfer transactions since then, just the unlock transactions.
Unlocks Can Send Price Crashing?
XRP unlocks are not new to the Ripple community, as scheduled unlocks take place every month. These unlocks see 1 billion XRP tokens unlocked from the escrow according to schedule. But most times, the majority of the unlocked tokens are sent back to escrow.
Usually, these unlocks do not negatively affect the altcoin’s price, but that’s when the unlocks are expected. This time around, the unlocks are unplanned, leading to speculation as to why Ripple would be unlocking XRP tokens outside of the unlock schedule.
So far, the XRP price seems to not be reacting to the unlock at all. It continues to trend around $0.61, with small losses of 0.91% in the last day. However, the altcoin is still seeing 4.74% gains in the last week, showing the positive upside that it saw earlier in the week.
Token price at $0.6095 | Source: XRPUSDT on Tradingview.com
Featured image from Linqto, chart from Tradingview.com
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