Original title: Ripple will unlock 1 billion XRP on August 1 – What to expect?
Original author: Vinicius Barbosa
Original source: finbold.com
Compiled by: Mars Finance, Eason
Ripple is responsible for developing the XRP Ledger ( XRP ) and is the largest holder of the token, and its actions affect its price. On August 1, the company will unlock another 1 billion XRP from the initial allocation, which may create relevant selling pressure.
It is worth noting that Ripple has been making these unlocks every month since implementing the escrow system in 2017, locking up 55 billion XRP. Currently, there are still about 44.02 billion XRP locked in these escrows, waiting to be sold off by Ripple into circulation.
The next round of escrow will end on July 31, releasing tokens with a nominal value of $600 million at press time. However, Ripple may re-lock most of them, as it has happened in previous months. Finbold retrieved on-chain data from XRPScan, showing that the unlocking will occur in the "Ripple (24)" and "Ripple (25)" accounts. The former has two escrow accounts worth 200 million and 300 million XRP, while the latter has a contract worth 500 million - a total of 1 billion XRP.
Ripple (24) and Ripple (25) accounts, escrow. Source: XRPScan / Finbold
Ripple has previously unlocked 1 billion XRP
Ripple unlocked 1 billion XRP in July and sent 200 million to its funding account " Ripple (1) ", relocking 800 million.
Monthly Ripple (XRP) unlocks – July 2024. Source: Finbold
Later, it added another 100 million XRP from the liquid address “Ripple(35) controlled by the company. This is similar to the activity observed in June, which resulted in monthly sell-offs of 400 million and 300 million XRP, respectively.
According to Finbold, Ripple has sold 1.826 billion XRP from its treasury account so far this year, worth $1.09 billion at the current price of $0.60 per token. The asset is down 1.60% over the same period, having recently recovered from a major crash.
XRP year-to-date price chart. Source: Finbold
XRP Price Analysis During Ripple Unlock
In January, Ripple sold 226 million XRP in three days, causing the token’s price to fall. In February, Ripple sold a total of 260 million XRP in another three days, with two of those days being good. In March, at the end of the first quarter, Ripple sold 240 million XRP from its treasury account in two days.
Additionally, Ripple sold 200 million XRP in two days in April and May, with three days of gains. However, June saw the largest monthly sell-off in the company's history, with 400 million XRP sold in two days. Recently, as prices surged, Ripple sold 300 million XRP in two batches of 150 million each.
XRP/USD daily price chart, Ripple sell-off. Source: TradingView / Finbold
As of press time, unlocking the tokens will cost $603 million. Interestingly, as the event approaches, the price of XRP has unexpectedly risen.
Ripple Interest Surges, Profit-taking Declines
Monthly unlocking of XRP dates back to 2017. According to Ripple, the mechanism is part of its mission to relieve pressure on the token, especially when its supply is extremely large. Sometimes, unlocking causes XRP prices to stagnate or fall slightly.
Therefore, if the price continues to rise over the next two days, August could look different. This bias is supported by the daily on-chain profitable transaction volume, which measures the number of transactions involved in achieving a profit.
Typically, an increase in realized profits puts downward pressure on the price of cryptocurrencies. However, for XRP, the situation is different, as on July 29, the amount of profits exceeded 480 million. But as of the time of writing, this number has decreased by two times, indicating that profit-taking has decreased.
Low profit taking may bring price stability. Therefore, if token holders do not take profits in the coming days, the price of XRP may go above $0.63.
Additionally, open interest in Ripple’s native token has increased to its highest level since April 16. At press time, OI, commonly known as OI, stands at $667.68 million. Open interest refers to the total value of open contracts in the market.
Therefore, this rise indicates that XRP's net position and speculation are increasing. OI also affects the price, because a rise in OI at the same time as the price rises indicates that buyers are aggressive. If the price continues to rise, it may bring an impulsive breakout for XRP.
XRP Price Prediction: Bucking the trend and rising
According to the daily chart, XRP has formed a symmetrical triangle, which is crucial to the recent engulfing candle that quickly pushed the price from $0.59 to $0.60. A symmetrical triangle forms when two trendlines with equal and opposite slopes converge.
Depending on the direction the cryptocurrency is heading, this narrow pattern could lead to a breakdown or a breakout. For XRP, the latter is the case, indicating that bulls are in control of the current trend. Interestingly, the price action is in stark contrast to the trend seen in Bitcoin (BTC) and other cryptocurrencies.
The last time this happened was in early July, when XRP rallied 40% in a matter of days. At press time, the relative strength index (RSI) is at 66.94, indicating strong momentum around the coin.
If this continues, the price of XRP might surpass $0.65 in the short term. Also, if August brings good news, the price of the coin might reach a yearly high of $0.72.
Now, the market is waiting for the 1 billion XRP to be unlocked on August 1, wondering what Ripple’s sell-off will bring. As this unfolds, traders and investors must remain cautious and weigh the economic fundamentals of cryptocurrencies.
