XRP is at an explosive threshold after a multi-day price surge, but the momentum has been cut short due to FUD (Fear, Uncertainty, and Doubt), following a large unlock. Ripple's executives have made efforts to calm the situation, but their explanations have not been enough to salvage the price of XRP amidst weekend volatility.
Ripple unlocks 1 billion XRP: Key information
On Saturday, concern and doubt spread within the XRP community after Ripple decided to unlock 1 billion tokens from the escrow account. According to information from Whale Alert, Ripple unlocked a total of 1 billion XRP tokens through three transactions: 500 million, 100 million, and 400 million tokens, with a total value of up to $3.28 billion.
This token was previously held in an escrow account according to a 2017 protocol aimed at stabilizing supply in the market. These transactions have drawn the attention of investors, amid speculation that they could lead to a sell-off.
"They want you to buy XRP while they sell it," CFA Rajat Soni, a prominent user on X, wrote.
Soni's comment, along with many other opinions, alludes to Ripple's ability to manipulate the schedule for releasing its escrow accounts. Meanwhile, the price of XRP has seen a positive growth streak, supported by favorable developments in the ongoing lawsuit between Ripple and the SEC (U.S. Securities and Exchange Commission).
In this context, Ripple's CTO, David Schwartz, spoke out to clarify concerns, stating that unlocking the escrow account is a standard routing activity.
"They always unlock on the first day of the month. You may not see any activity on the ledger just because the escrow account has been unlocked. The ledger doesn't automatically do anything; it is always waiting for someone to send a transaction to activate," Schwartz explained.
Community members also pointed out that Ripple's escrow account has randomly unlocked some contracts in the past two months.
However, Ripple's escrow system remains a controversial topic, with the company holding a large volume of XRP in this arrangement. Data from XRPscan indicates that approximately 35.6 billion XRP are still held in escrow after the unlock on August 9.
"... can Ripple manipulate the release date of the escrow contract at any time? So theoretically, could they unlock the entire 36 billion XRP in the next 5 minutes?" a user questioned.
Based on its operational mechanism, Ripple's escrow releases a maximum of 1 billion XRP monthly, a system designed to avoid flooding the market.
This system helps maintain the price of XRP, and while its structure may be predictable, individual transactions, especially those displayed on the XRP Ledger, often tend to have a significant impact on the market.
Ripple price outlook: How are buyers and sellers positioning XRP?
Analysts believe that the price of XRP may be preparing for a breakout on higher timeframes. However, Ripple's price seems to be cooling off on the daily timeframe before the next move, with bullish investors beginning to position themselves.
Based on bullish volume profiles (green), bullish investors are waiting for an opportunity to interact with Ripple's price right in the demand zone between $2.9611 and $2.7354. This means that the downward trend could continue an additional 5% to 7% before potentially reversing.
The RSI (Relative Strength Index) is also declining, indicating that momentum is weakening. If the immediate support at $3.1061 fails to hold, the price of XRP could drop until bullish investors have a say at the aforementioned level, with the demand zone providing significant support below.
Conversely, if buying pressure increases at current levels, the price of XRP could continue its upward trend, potentially surpassing bearish investors (red volume pattern). However, with the supply area between $3.4000 and $3.5493 exerting pressure above, bullish investors looking to open long positions on XRP might want to wait for a candle close above the average threshold or midpoint of the supply area at $3.4687.
A candle close above this level on the daily timeframe could trigger additional bullishness, enabling Ripple's price to reclaim the $3.6607 peak. Such a move would equate to a 7% increase from current levels.
