Why XRP price severely crippled and unable to gain positive momentum?
On the first day of July, Ripple unlocked 1 billion XRP tokens from its escrow wallet in just two transactions. Reportedly, the tokens are cumulatively worth more than $ 177 million, but their scheduled release is not expected to affect XRP price performance.
Ripple is blamed for the price performance of the native token
In December 2017, Ripple transferred 55 billion XRP to its multiple cryptographically-secured escrow wallets to ensure supply predictability.
Ripple has long been accused of negatively affecting XRP prices with its quarterly sales. In particular, nearly 4,000 members of the XRP community signed a petition on Change.org to urge people to stop selling XRP.
Last August, Ripple CEO Brad Garlinghouse announced that these sales were intended to increase token adoption. However, despite XRP’s sales dropping only $ 1.75 in the first quarter of 2020, the price of XRP is still down 8% (in stark contrast to the rest of the cryptocurrency market).
Since January 2018, Ripple has owned 60 billion XRP tokens valued at a staggering $ 198 billion at the highest price of $ 3.30.
XRP price is less efficient than Bitcoin and Ethereum
For two years of operation, XRP was one of the worst performers in the cryptocurrency space, alongside XLM. XRP has ever reached an all-time high of over $ 3.50. But since then, it has plummeted so much that USDT has knocked it out of third place. XRP remains over 94% down from its record set in early 2018 on the XRPUSD pair. On the XRPBTC pair, the asset is currently down 91%.
Ripple XRPBTC & XRPUSD Comparison | Source: TradingView
XRP has reached extremely oversold conditions, but any light of a rally is immediately sold down. Even Ripple executives who pledged to stop selling themselves have no positive effect on price action.
But what causes inefficiencies in XRP and extreme deviations between it and other assets?
Watching Tether “Flippen” the asset, and Bitcoin and Ethereum surge could be causing mass capitulation amongst holders of the altcoin. But while someone is selling off their XRP at extremely low levels, the largest account holders – whales – are absorbing the selling.
Data shows that the largest wallets under 1% are increasing their holdings, while smaller wallets sell XRP. Even as the downtrend continues in XRP, even reaching new depths, why investors continue to hold hope can be seen below.
Although XRP experienced nearly three years in a 90% downtrend when it broke through, it could not be prevented. In less than a year, XRP has increased by more than 50,000% – one of the largest gains ever recorded in cryptocurrency history. If this happens again, anyone selling now at these lows will experience something much more painful than the downtrend.
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