An unknown wallet has woken up 300 million XRP tokens, which is roughly equal to $167. 9 million from escrow. Such an event is regular for Ripple as a self-scheduled monthly action to provide additional liquidity to the market. The impact of this on XRP price will be worth noting.
As for now, XRP is struggling with bearish tendencies and trading close to significant support levels. This brings to the equation that this unlock has generated quite a few debates on its possible effects on the price of the digital asset. Is this XRP surge indicating a pump approach, or is the token doomed to lingering pressure?
XRP’s Bearish Struggles Continue
Even after such massive unlocking, pressure still reduces the value of XRP. This recent price analysis shows that the token is still in a bearish trend and cannot find its way out of the descending channel. This has characterized the rates over the last one or two weeks.
As can be seen from the 4-hour attached chart, XRP faced many difficulties in this pattern to show a clear downtrend within a channel by having a series of lower highs and lower lows.
The CCI indicator is -77, which is a sign that the Woodies Commodity Channel Index is highly oversold. It is used to measure the extent to which the market is oversold, with the current or “inverse’’ having a value of 95. This technical formation might portend a rebound if there is an increase in the buying pressure, though the broader market indicators are still bearish.
XRP’s price has recently consolidated around the $0.55 mark, as seen in the additional data provided by CoinMarketCap.
The token’s market capitalisation is relatively close to $31 billion. The token’s value has been reduced by 48% over the past 24 hours. This decline is also evidenced by the token trading volume, which recorded a 59% increase. This indicates the market is still struggling with a pessimistic outlook.
Market Sentiment and the Potential for a Pump
The unlocking of 300 million XRP, recently approved by Vitalik Butterin as a potential Bitcoin competitor, has inevitably led to speculation about its impact on the market. Historically, large-scale releases have had mixed effects, sometimes resulting in significant price movements, either upwards or downwards, depending on prevailing market conditions.
Currently, XRP is trading within a tight range, and the question on every trader’s mind is whether this influx of new tokens will catalyze a breakout from this range.
On the one hand, the market reacts to increased supply, which can exert downward pressure on prices, especially if it is not matched by corresponding demand. XRP has yet to show signs of a strong recovery despite the unlocking.
The token continues to face significant resistance at the $0.57 and $0.62 levels. Recent attempts to break through these thresholds proving unsuccessful. XRP must clear these hurdles before the outlook remains uncertain.
However, the potential of a pump cannot be ruled out, although it is at a lower probability scale. Although, at the moment, all indicators are oversold. If there is a favorable change of motion among market participants, then a bounce could occur.
Also, the increased trading volume in the recent sessions may signal that buyers are accumulating current prices. Buyers could be waiting for a reversal. If this buying pressure continues, it may form a short-term rally and enable XRP to test higher resistance levels.
XRP Price Facing Consolidation: What’s Next?
As of the recent unlocking, XRP predicted to reach the heights of Bitcoin, is in a precarious position it has never been in before.
The token’s price has been oscillating within the narrow range, and this is due to market uncertainty. This consolidation phase may precede a significant upswing or downswing depending on market participants’ reactions to the available XRP supply.
Using CoinMarketCap, one can discover that the price of XRP over time has been harboring between $0. 55 and $0. 56 throughout the past twenty-four hours, with variation from this number at times.
While the number of tokens unlocked is significant, the token has not been able to maintain the upward trend. Thus pointing to market skepticism. There is a lot of anticipation about how the market will react to the newly unlocked XRP. Hence this staking preparation.
This means that if the XRP’s sentiment does not turn around from its current dismal bearish trend and goes below the current support at $0. 55, it could mean the stock will follow the negative trend, hence more losses.
On the other hand, if the token tends to trade and sustain above this level, then the penetration of the upper trend line of the descending channel could signal the start of a recovery phase.
⚠️Disclaimer
This content aims to enrich readers with information. Always conduct independent research and use discretionary funds before investing. All buying, selling, and crypto asset investment activities are the responsibility of the reader.
