Back in July, Judge Analisa Torres made a significant ruling, declaring that XRP programmatic sales do not qualify as securities. This ruling initially caused a rally in the XRP token price. However, as the excitement surrounding the ruling has worn off and the United States Securities and Exchange Commission (SEC) has begun to fight back, the price of XRP is now correcting back downward. This correction has led to massive sell-offs of the token.
A recent XRP transaction flagged by an on-chain whale tracker has raised concerns among investors. The transaction involved a single whale moving a total of 29.3 million tokens to a centralized exchange, specifically the Bitstamp exchange. This significant move, worth a little over $15.13 million at the time, has prompted worries of bearish pressure on the cryptocurrency’s price.
Impact of Centralized Exchanges
When investors transfer tokens to centralized exchanges like Bitstamp, it is often to sell their tokens. This is because centralized exchanges typically offer lower fees and deeper liquidity, which can help mitigate the impact of selling. Given the destination of the whale’s transaction, it is possible that the whale has already begun selling the coins, as evidenced by a quick dip in the XRP price around the time of the transaction. The large stash of tokens held by the whale could lead to further selling, potentially resulting in up to a 20% decline in the XRP price.
Challenges for XRP Price
The XRP price is already struggling, and the bearish scenario described above becomes more likely, especially considering the widespread negative momentum in the broader crypto market and Bitcoin’s difficulties in recovering. If the XRP price experiences another dip from its current position, it could easily fall to the $0.48 territory.
Despite the concerns surrounding the large move by the whale to Bitstamp, the bulls have not remained passive. Shortly after the transaction was seen on the blockchain, a massive buy of $1.5 million worth of XRP was reported on the Bybit exchange. This significant purchase led to two quick price spikes in XRP, briefly reaching $0.5311 before retracing downward. The presence of substantial buy pressure indicates that there are investors willing to offset the selling pressure caused by the whale transaction.
It is worth noting that XRP is still holding above the 200-day moving average, which suggests a bullish sentiment, at least in the mid-term. While a decline of around 20% may be expected due to the selling pressure, it is unlikely to last long before the digital asset begins to pick up again.
The recent correction in the XRP price has prompted massive sell-offs of the token. The transaction by a single whale, moving a significant number of tokens to the Bitstamp exchange, has raised concerns among investors. However, the presence of buy pressure and the bullish sentiment indicated by XRP remaining above the 200-day moving average suggest that the decline in price will likely be temporary. As the battle between the SEC and XRP continues, the future of the token remains uncertain, but its resilience in the face of selling pressure provides some hope for XRP holders.