Back in July, Judge Analisa Torres made a significant ruling stating that XRP programmatic sales did not qualify as securities. This decision initially sparked a rally in the token’s price. However, as the euphoria surrounding the ruling has subsided and the United States Securities and Exchange Commission (SEC) has started to take action, the price of the XRP token is experiencing a correction, leading to a massive sell-off.
Recently, an on-chain whale tracker detected a significant XRP transaction that could impact the price of the cryptocurrency in a bearish manner. The transaction involved a single whale moving a total of 29.3 million XRP tokens to a centralized exchange, namely Bitstamp. The value of these tokens at the time was a little over $15.13 million.
While large transactions are not uncommon in the XRP network, the destination of this particular transaction has raised concerns among investors. Typically, when investors transfer tokens to centralized exchanges like Bitstamp, it is to sell their holdings. Centralized exchanges offer lower fees and deeper liquidity, which helps mitigate the impact of selling pressure.
It is possible that the whale has already started selling the coins, as evidenced by a quick dip in XRP’s price around the time of the transaction. However, with such a large stash of tokens, further selling could drive the price down even further, potentially causing a decline of up to 20%.
The already struggling XRP price is compounded by the current negative momentum in the broader crypto market. Bitcoin, the leading cryptocurrency, is struggling to recover, which adds to the bearish scenario for XRP. If the market experiences another dip from its current state, it is highly likely that the price of XRP will fall to the $0.48 territory.
Despite the concerns raised by the large $15 million transaction to Bitstamp, bullish investors have not remained idle. Shortly after the transaction was observed on the blockchain, a massive buy order worth $1.5 million was executed on the Bybit exchange, specifically for XRP.
This substantial purchase led to two quick spikes in the XRP price, briefly reaching $0.5311 before retracing. This surge indicates that there is still a significant amount of buy pressure in the market for XRP, which could help counterbalance the selling pressure caused by the whale transaction.
Interestingly, XRP is still holding above its 200-day moving average, which suggests a bullish sentiment in the mid-term. Although a 20% decline in price due to selling pressure is expected, it is likely that the decline will not be sustained, and the digital asset will recover soon after.
The recent large transaction involving an XRP whale has created bearish pressure on the token’s price. The destination of the transaction, a centralized exchange, has raised concerns among investors, suggesting that the tokens might be sold. This, coupled with the negative momentum in the broader crypto market and Bitcoin’s struggle to recover, contributes to the likelihood of a further decline in the price of XRP.
However, bullish investors have responded with significant buy orders, causing temporary price spikes and indicating that there is still considerable demand for XRP. Additionally, the token’s ability to hold above its 200-day moving average suggests a positive sentiment in the midterm.
While the bearish pressure on XRP’s price is a cause for concern, it is important to consider the broader market dynamics and the potential for a rebound. As the cryptocurrency market is known for its volatility, it is crucial for investors to closely monitor developments and adjust their strategies accordingly.
Follow Best Owie on Twitter for insightful market updates, analysis, and the occasional humorous tweet.
Featured image from iStock, chart from TradingView.com.