Ripple CTO David Schwartz says that giving away XRP is worse than selling the altcoin, addresses holder concerns.
XRP whales distribute holdings, while several segments of retail users buy the altcoin this week.
XRP trades at $0.55, erasing 7.6% of its value since Monday.
Ripple (XRP) Chief Technical Officer (CTO) David Schwartz addressed concerns about token giveaways by the cross-border payment remittance firm.
Schwartz responded to tweets on X and shared his thoughts on why giving away XRP as a reward is worse than selling.
XRP trades at $0.55 at the time of writing.
Daily digest market movers: Ripple CTO says XRP giveaway is worse than selling .
XRP trades at $0.55 at the time of writing.
Daily digest market movers: Ripple CTO says XRP giveaway is worse than selling
The Ripple network is known to periodically sell XRP tokens to sustain its ecosystem. The cross-border payments remittance firm uses XRP as a bridge currency to settle transactions, thereby selling XRP Ledgerâs native token to member institutions in the ODL network.
Ripple has been slammed by XRP holders on several occasions for token transfers and sales. CTO David Schwartz addressed the issue by sharing his thoughts on pledging XRP tokens to a liquidity pool or giving them away as a reward.
While one user commented on how there should be giveaways, Schwartz explained that fraudsters enter the game where giveaways or rewards are announced. Whatâs more Schwartz explains that locking XRP tokens in a liquidity pool would mean the equivalent of selling 50% of them for the other asset in the pool. This creates selling pressure on the asset, negatively influencing price.
The Ripple CTO had shared his thoughts on the issue in 2021 as well.
Ripple recently announced that its stablecoin Ripple USD (RUSD) will be available for institutions in its network, post regulatory approval.
The stablecoin is currently in a private beta phase and is not available for purchase or trade yet.
Santiment data shows that large wallet investors holding over 100 million XRP have distributed their holdings as retail traders accumulated.
Typically, whale distribution is considered a bearish sign for an asset.
Technical analysis: XRP dips to $0.55
XRP erased nearly 8% of its value this week, down to $0.55 early on Friday at the time of writing. The altcoin has been in a multi-month downtrend since its July 2023 top.
XRP could sweep liquidity at $0.51 if there is a further correction in the altcoin. At this point, traders who accumulated could attempt to push it back above key support at $0.55 and $0.57.
The Moving Average Convergence Divergence (MACD) indicator shows red histogram bars under the neutral line, signaling negative underlying momentum in the Ripple price trend.
A daily candlestick close above $0.57 could invalidate the bearish thesis. This has been a key resistance level for the altcoin throughout August. XRP could rally toward $0.60, a psychologically important level for Ripple.
