The decision by Ripple Labs to lock away 700 million XRP tokens into escrow has captured the interest of cryptocurrency enthusiasts during a period of negative market sentiment.
Ripple Secures 700 Million XRP in Escrow
In a recent announcement on social media platform X (previously known as Twitter), blockchain transaction tracker Whale Alert reported that Ripple Labs has placed 700 million XRP tokens in escrow.
This action effectively places these tokens on hold, restricting them from being traded or utilized for any other purposes.
Ripple Labs’ move to lock these tokens comes amidst a significant downturn in the overall cryptocurrency market, presumably as a measure to prevent a substantial decline in the price of XRP amidst prevailing negative sentiment.
Escrow Locking and Price Fluctuations
Historically, the practice of transferring XRP into escrow has shown positive outcomes. Whenever Ripple Labs has locked tokens in escrow in the past, the token has experienced some relief, gaining momentum during bearish market conditions.
Conversely, when Ripple has released tokens from escrow, the price of XRP has tended to drop.
Following the recent transaction, the price of XRP was hovering around $2.90 at the time of writing, reflecting a decrease of 3.60% over the past 24 hours.
Despite the price dip and prevailing bearish sentiment, traders and investors have displayed significant interest in XRP, leading to a notable 65% surge in the token’s trading volume.
Optimistic On-Chain Data Analysis
Notably, some long-term holders and investors have taken advantage of the recent price decline to accumulate tokens, as indicated by data from on-chain analytics provider Coinglass.
Analysis of spot inflows and outflows revealed a substantial outflow of approximately $70.50 million worth of XRP from exchanges in the last 48 hours, hinting at potential accumulation activities.
This significant outflow suggests a favorable buying opportunity in the market.
Currently, major liquidation points are set at $2.791 on the downside and $2.963 on the upside, with traders exhibiting over-leveraging tendencies at these levels.
If market sentiment remains negative and the price drops to $2.791, it could trigger liquidation of long positions worth nearly $55.10 million. Conversely, a shift in sentiment leading to a price increase to $2.963 may result in liquidation of short positions valued at around $35 million.
Technical Analysis and Future Price Levels
According to technical analysis by CryptoCrypto, XRP is currently positioned at a critical support level of $2.88, with momentum showing signs of waning.
Considering recent price movements, failure to sustain the $2.88 level could potentially drive XRP down by 10%, bringing it to the next support level at $2.55.
On a positive note, XRP is trading above the 200 Exponential Moving Average (EMA) on the daily chart, suggesting an upward trend for the asset.