Ripple Locks 1B XRP as Price Slides Below $1.60 Amid Market Weakness
Key Takeaways:
- The 1 billion XRP escrow lock which was identified by Whale Alert is related to the Ripple monthly supply agenda
- The relocation is added amidst continued losses in XRP into February following a dismal end of January closing
- Unlocked tokens were re-locked on a majority, which reduced immediate supply to circulation
Ripple has again transferred a huge tranche of XRP under escrow, which is also getting attention as the token lags together with other market plunges in a general crypto drawdown. On-chain information validates the transfer as being in accordance with the long-standing escrow mechanism of Ripple instead of a sudden supply shock.
Whale Alert Flags 1 Billion XRP Escrow Movement
Blockchain tracking service Whale Alert declared that 1 billion XRP is under escrow at Ripple, sparking new debate on dynamics of supply. The trading was completed at the beginning of February, which was in line with the monthly scheduling of Ripple as announced nine months prior.
In 2017, Ripple launched its escrow method where 55 billion XRP is held in time-related agreements. With this system, the maximum number of XRP released monthly can be up to 1 billion, with any surplus going back to escrow.
Read More: Ripple’s RLUSD Surges Past $215M Volume, Eyes Top 50 Crypto Spot in Market Shakeout
How the Escrow Cycle Played Out This Month
On chain data indicate that the release was divided into several huge transfers, and then re-locked quickly. Similar to other previous months, Ripple put in escrow most of the unlocked XRP, with the net growth in circulation amounting to about 300 million XRP.
The trend is consistent with Ripple usual operating style which includes the selective portion of unlocked tokens to liquidity requirements, ecosystem building or business expenses.
XRP Price Weakens as Selling Pressure Persists
The escrows movement came in as XRP was in its downward trend. The token dropped by over 10% in January and the month ended around the $1.50 mark, the lowest since October sell off in the market.
The first two weeks of February have not helped much. XRP has gone down together with Bitcoin and Ethereum that have recently fallen to the multi-month low. However, as of last check, XRP was trading at around $1.57 which is 5% lower than it was in the past 24 hours.
Although the timing is unfavorable, in historical terms, there is little indication of steep short-term price changes that may be caused by monthly escrow activity. In its turn, the weakness of XRP can only be explained by the falling risk appetite in the wider crypto market
Read More: Ripple Launches Treasury Platform After $1B GTreasury Deal, Targeting Trapped Capital Globally
Analysts Split on XRP’s Next Direction
Market views remain mixed. Other observers believe that XRP is following a well-known pattern of long-term consolidation which can often be observed over the course of several cycles, and referencing which means that any significant breakout may be years away.
Still others interpret the current price action as a re-accumulation phase where long term holders slowly accumulate positions during the low volatility times.
The post Ripple Locks 1B XRP as Price Slides Below $1.60 Amid Market Weakness appeared first on CryptoNinjas.
You May Also Like
UAE Authorizes AE Coin for Federal Government Payments
Exploring Market Buzz: Unique Opportunities in Cryptocurrencies
