The XRP price has recently plummeted to $0.55, struggling to break above the $0.60 resistance level. One of the main reasons for this drop is Ripple’s unlocking of 1 billion XRP tokens ($559 million) from its escrow wallet on September 1. This monthly token unlock created a supply shock in the market, leading to a bearish sentiment among XRP investors who feared that Ripple might sell off a significant portion of the unlocked tokens.
In addition to Ripple’s token unlocks, the broader bearish sentiment in the crypto market has also played a role in driving down the XRP price. Bitcoin’s drop below $58,000 on September 1 triggered a downtrend for other crypto tokens, including XRP. The uncertainty surrounding Bitcoin’s price action has further added to the risk of XRP dropping lower if a bullish trend is not established soon.
Despite the negative impact of Ripple’s token unlocks and the overall bearish sentiment, there are some positive developments that could support the XRP price. Ripple locked 800 million XRP tokens ($442 million) back in escrow, alleviating concerns about a massive sell-off. Additionally, the decreasing likelihood of the US Securities and Exchange Commission (SEC) appealing its case against Ripple is a favorable development for XRP and its holders.
The recent drop in the XRP price is a result of multiple factors, including Ripple’s token unlocks and the bearish sentiment in the broader crypto market. While these developments have caused panic among XRP investors, there are also positive signs that could help stabilize the price in the long run. As the crypto market continues to evolve, it is essential for investors to stay informed and cautious in their decision-making process.