From March 28 to March 30, XRP whales — accounts holding more than 100,000,000 tokens, dumped a grand total of 1.12 billion of the digital asset, per a March 30 X post shared by on-chain analyst Ali Martinez.
For additional context, at present, XRP whales continue to hold roughly 8.88 billion tokens, down from 10 billion before the latest round of liquidations.
This latest development presents quite a bearish signal all on its own. Similar large-scale sell-offs have previously signalled either the beginning of wide-scale profit-taking or major shifts in investor sentiment.
However, this time around, the liquidations could have an even more impactful effect on the cryptocurrency’s shorter-term price action — and it’s due to timing. Per Ripple’s escrow schedule, 1 billion XRP tokens will be unlocked on April 1.
Since the start of the year, Ripple has sold more than 900 million tokens through three equal transactions, valued at a grand total of $2.1 billion. In conjunction with the whale sell-off, a similar move could serve to push XRP prices further to the downside.
Will the whale sell-off cause XRP prices to drop?
At press time on March 31, XRP was changing hands at a price of $2.07, having marked a 15.59% drop in the last seven days. Quite notably, the decline in price happened on strong volume, indicating that significant selling pressure is present.
While XRP did lose $7 billion in market capitalization over the course of the two days in which whales went on a selling spree, readers should note that this was part of a broader market pullback.
So, what now? The $2 mark represents both a psychologically significant level as well as key technical support. Most technical analysts remain bullish regarding the token’s long-term prospects, but near-term price action is in a much more precarious position
Veteran trader Peter Brandt is one of the few analysts who sees further losses in the cards — projecting a drop to levels as low as $1, according to a recently spotted head and shoulders pattern.
In addition, once the Securities and Exchange Commission (SEC) finally signs off on lifting the injunction that prevents the sale of XRP to institutional investors, market sentiments might very well change.
Once all is said and done, however, unless market-wide sentiments see a dramatic shift in short order, XRP will most likely fall below $2 — although it remains to be seen whether the drop will continue or if a strong level of demand will be established at that price.
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