Home Altcoins News Ripple Locks 700 Million XRP Tokens in Escrow: Price Impact Ahead

Ripple Locks 700 Million XRP Tokens in Escrow: Price Impact Ahead

XRP

Ripple Labs has recently made waves in the cryptocurrency world by locking 700 million XRP tokens into escrow, a move that has captured the attention of traders and investors alike. This action, taken on February 2, 2025, comes amid a rough period for the cryptocurrency market, raising the question: what does this mean for XRP’s price, and should investors be concerned?

Why Ripple Locked 700 Million XRP

On February 2, 2025, Ripple Labs moved 700 million XRP tokens into escrow, a decision that restricts the availability of these tokens for trading. By locking up such a large quantity of XRP, Ripple reduces the amount of the asset circulating on the market. This strategy aims to control the token’s supply and reduce potential downward pressure on its price.

The timing of this move is important, as it comes during a period of overall market weakness. Many major cryptocurrencies, including Bitcoin and Ethereum, have seen a decline in value recently. With XRP also experiencing pressure, Ripple’s move to lock tokens could be a way to help stabilize the price in the face of a broader market downturn.

What Happens When Ripple Locks Tokens?

Ripple has used this escrow strategy before, and historically, it has had a positive effect on XRP’s price. When Ripple locks tokens, the supply available for sale is reduced, which can alleviate selling pressure. In turn, this has often resulted in price stabilization or slight increases, especially when the market is struggling.

On the other hand, whenever Ripple releases tokens from escrow, the price tends to drop. The influx of additional XRP on the market raises the total supply, often driving prices lower. As a result, by locking up these tokens, Ripple is attempting to prevent a significant fall in XRP’s price during these uncertain times.

XRP was trading at approximately $2.90, a decrease of 3.60% over the past 24 hours. Despite the drop, trading volume surged by 65%, which indicates that investor interest remains strong even as the price falls.

On-Chain Data Shows Investor Confidence

Data from Coinglass, an on-chain analytics firm, suggests that XRP may be seeing accumulation despite the recent decline in price. Over the past 48 hours, exchanges have seen a large outflow of XRP, totaling $70.5 million. This suggests that long-term investors are using the price dip as an opportunity to purchase more XRP, confident in its future potential.

This accumulation could offer some support for XRP, as the amount of XRP being withdrawn from exchanges reduces the circulating supply, which may help counteract any further price declines.

Liquidation Levels: Potential for Volatility

XRP’s price is currently at a critical juncture, with several liquidation levels on the horizon. The lower liquidation level sits at $2.791, which could trigger a wave of liquidations for long positions if the price reaches that point. On the other hand, if XRP’s price rises to $2.963, short positions could face significant liquidations, providing upward momentum.

These liquidation levels suggest that XRP could experience considerable volatility in the near term, depending on how market sentiment shifts.

Technical Indicators and Future Price Predictions

From a technical standpoint, XRP is currently testing the $2.88 support level. If this level holds, there may be some stability for XRP in the short term. However, if the price breaks below this level, the next major support is at $2.55, representing a potential 10% drop from its current position.

XRP is still trading above its 200 Exponential Moving Average (EMA) on the daily chart, suggesting that the overall trend remains positive. This could give hope for a recovery if the market sentiment improves.

Conclusion: What’s Next for XRP?

Ripple’s decision to lock 700 million XRP tokens into escrow shows that the company is actively working to protect the token’s value during uncertain times. While XRP’s price outlook remains mixed, the escrow move could help stabilize the asset in the short term and limit further price drops. As always, investors should keep a close eye on market trends and key support levels in the coming days to better understand the direction of XRP’s price.

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Julie J

Julie is a renowned crypto journalist with a passion for uncovering the latest trends in blockchain and cryptocurrency. With over a decade of experience, she has become a trusted voice in the industry, providing insightful analysis and in-depth reporting on groundbreaking developments. Julie's work has been featured in leading publications, solidifying her reputation as a leading expert in the field.

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