The post Ripple’s Escrow Strategy and Its Impact on XRP Price appeared first on Coinpedia Fintech News
Ripple, a significant player in the cryptocurrency market, has faced inquiries regarding its extensive sales of XRP. Ripple’s Chief Technology Officer David Schwartz recently clarified the company’s rationale behind these sales. He pointed out that Ripple is the largest holder of XRP, and selling it is necessary as holding it indefinitely isn’t practical.
XRP Holdings Breakdown
Ripple’s Q1, 2024 report provided detailed information about its XRP holdings. These holdings are categorized into two groups: XRP immediately available in Ripple’s wallets and XRP locked in on-ledger escrow accounts. These escrow accounts will release XRP monthly over the next 42 months, with Ripple not having access to the escrowed XRP until it’s released according to this schedule. Most of the XRP released each month is returned to the escrow account, indicating a controlled release strategy.
As of March 31, 2024, Ripple held 4.8 billion XRP, with an additional 40.1 billion XRP in on-ledger escrow.
XRP Price Outlook
Currently, the 7th largest crypto XRP is around $0.50 per token. XRP has traded within an upward corridor since May 2023, with the upper dynamic resistance at $0.80 per token. However, it’s currently near its support level after a 22% decline in mid-April. If XRP sees significant accumulation, it could rise above $0.53 and towards $0.57. However, if the current bearish trend continues, XRP’s value may drop below $0.50 to trade at $0.44.
Moreover, XRP’s Market Value to Realized Value (MVRV) ratio, observed through 30-day and 365-day moving averages, shows negative values of -1.3% and -9.8%, respectively. This suggests that XRP is undervalued compared to its historical cost basis, indicating a buying opportunity for investors looking to ‘buy the dip’ and trade against current market movements.
Recent Developments and Short-Term Price Movements
Meanwhile, recent XRP and Ripple ecosystem developments may impact short-term price movements. The XRP Ledger has seen a surge in activity, processing over 251 million transactions in Q1 2024, doubling from the previous quarter. Despite the increased transaction volume, fees have dropped by 45% to approximately $0.000856.
Interestingly, the sentiment among XRP traders remains mostly fearful and neutral, according to the “Fear and Greed” indicator. However, despite this cautious sentiment, some optimistic traders forecast significant price movements, with predictions suggesting XRP could reach $3.
