- Ripple unlocked millions of XRP from its escrow wallet in its usual monthly fashion.
- XRP’s price fell by 4.16%, after facing rejection at $0.54 and losing support at $0.52.
- With increasing distribution, XRP may fall as low as $0.45 unless buying pressure appears.
According to whale tracking handle Whale Alert, Ripple (XRP) has unlocked 200 million XRP tokens. The activity is one that market participants may be familiar with especially as the blockchain firm does it every month.
The locking of XRP in escrow wallets dates back to 2017. For Ripple, the goal of locking XRP gradually is to prevent the devaluation of the cryptocurrency. So, when the XRP tokens are unlocked from the escrow accounts, it helps to cushion the liquidity of the cryptocurrency in circulation.
Increased Circulation, More Decline
While unlocking XRP tokens monthly is not a strange strategy, the effect on the XRP price action has mostly been negligible. This time, XRP was not able to maintain consolidation. According to CoinMarketCap, the value of XRP fell by 4.16% in the last 24 hours. However, the token has been able to maintain its price a little above $0.50.
From the XRP/USD 4-Hour chart, the token’s initial jump to $0.54 was met with rejection around the same spot. This rejection ensured the market structure for XRP became bearish. It also lost support at $0.522 and $0.509 before settling at $0.505.
If buying pressure does not appear soon at $0.50, then XPR may have no other option than to trade between $0.45 and $0.49.
Furthermore, the Moving Average Convergence Divergence (MACD) has continued to hit lower lows and was in the negative region. At press time, the MACD was -0.0027. Negative values of the MACD indicate that the 26-day EMA was above the 12-day EMA.
Also, the blue dynamic line was below the orange dynamic line, indicating that sellers had more control over the market than buyers. If the MACD remains the same or trends lower, XRP’s momentum might continue to increase in the downward direction.
XRP Targets $0.49
Another indicator to look at is the On-Balance-Volume (OBV). At the time of writing, the OBV was down to 3.71 billion. During a trading range, rising OBV suggests that accumulation is taking place.
But when the OBV falls, it means that distribution is the order of the day. Since XRP was experiencing more distribution than accumulation, it means that a downward breakout could be imminent.
If demand does not outweigh the selling pressure soon, the OBV might go lower. In turn, XRP might be forced to lose hold of the $0.50 region.
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