Ripple has recently unlocked a significant amount of XRP tokens, causing concern among investors. This release is part of Ripple’s strategy to maintain liquidity and control supply in the market by releasing 1 billion XRP tokens monthly. While these releases are important for market liquidity and meeting the needs of Ripple’s business partners, they can also lead to temporary price drops for XRP as the supply increases.
The release of 500 million XRP tokens, divided into two batches of 200 million and 300 million, has raised alarm among investors due to the struggling XRP prices. The increased supply has resulted in a decrease in demand, creating uncertainty among investors. Ripple acknowledges that these regular releases can cause short-term price fluctuations, but they remain committed to this strategy as it ensures a steady supply of XRP for various use cases.
Currently, XRP is trading at $0.4843, experiencing an 11% drop in the past 24 hours. This decline is in line with the overall market trend, led by Bitcoin, which has decreased by over 5%. The recent price movement is a reaction to the political and security instability in the Middle East. Investors view cryptocurrencies as a hedge against traditional markets, leading them to take advantage of the price dip and accumulate tokens in anticipation of the next market rally.
The ongoing SEC v. Ripple case also plays a significant role in determining XRP’s price movement. Ripple’s Chief Legal Officer, Stuart Alderoty, highlighted the SEC’s recent loss in court, where a judge ruled that the SEC cannot demand disgorgement from the defendant if the buyer hasn’t suffered financial loss. This ruling could have implications for Ripple’s legal battle with the agency, with reports suggesting that the SEC is seeking up to $2 billion from the company. The resolution of the case could generate increased investor interest, particularly from institutional investors, and potentially lead to the launch of an XRP ETF.
XRP bulls are focused on defending the $0.48 support level to maintain the altcoin’s bullish momentum. On the upside, they aim to break above the $0.70 resistance level and reach $1 and the all-time high of $3.89.
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