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Ripple Locks 700 Million XRP in Escrow – What Next for XRP?
In a surprising move, Ripple has taken drastic measures to stabilize the price of its native cryptocurrency, XRP. The company has locked away an astonishing 700 million XRP tokens into escrow, a significant portion of the overall supply. This bold action aims to protect investors from further losses and potentially create buying opportunities.
The unprecedented decision comes at a time when the market is experiencing a downturn, with many predicting further declines in the near future. By removing such a large amount of liquidity from circulation, Ripple hopes to stem the bleeding and prevent an even more dramatic collapse in price.
But what does this mean for XRP investors? Can this move actually help stabilize the cryptocurrency’s value?
Escrow Locking: A Historical Pattern
In the past, when Ripple has locked tokens into escrow, it has historically led to a relief rally. In such situations, XRP often experiences an uptrend, even in the midst of a broader market downturn. However, unlocking these same tokens tends to result in a price drop. It is crucial for investors to understand that this latest move seems aimed at stabilizing XRP’s value.
Bullish Signals Amid Price Drop
Despite the recent 3.60% drop in the last 24 hours, trading volume has surprisingly surged by an astonishing 65%. This increase suggests that there are still buyers willing to purchase XRP, even at lower prices. Moreover, a significant amount of $70.50 million worth of XRP has left exchanges in the past 48 hours, indicating that long-term holders have begun accumulating XRP.
The technicals also paint a positive picture for XRP. The cryptocurrency remains above its 200 Exponential Moving Average (EMA), which signals the potential for an uptrend to resume. However, it is vital for investors to be aware of two key levels: $2.791 and $2.963. A drop below these points could trigger significant liquidations.
Conclusion
The Ripple-escrowed XRP tokens will remain out of circulation until they are released according to the company’s monthly cadence. This recent move has sent shockwaves through the cryptocurrency market, with some wondering if this action can truly stabilize XRP’s value.
While there is a chance that Ripple’s bold decision could help alleviate the downward pressure on XRP, it remains unclear whether this will have any long-term impact. Nevertheless, the sudden surge in trading volume and accumulation by long-term holders suggest that investors see potential in XRP’s future growth.
Source: cryptonewsland.com
