XRP has seen a significant surge in its price, climbing to $0.66 on Wednesday, marking an 8% increase over the past 24 hours. This surge comes amidst important developments in the XRP ecosystem and renewed investor optimism in the market. One key factor contributing to this upward price action is the growing accumulation trend among investors. Over the past five weeks, there has been a sharp increase in the number of wallets holding at least 10,000 XRP, reaching a six-month high of 279.4k addresses. This increase in high-value wallets indicates a bullish sentiment toward XRP.
The correlation between large XRP holdings and the asset’s market value has been consistent throughout 2024. Analyzing data from on-chain crypto analytic platforms, it is evident that as more high-profile investors accumulate XRP, the asset’s market value tends to rise accordingly. This trend highlights the influence that large holdings have on shaping the price dynamics of XRP.
The recent filing by the SEC on Tuesday has also had an impact on the sentiment among XRP holders. The filing indicates plans to revise the Binance complaint, potentially affecting tokens like SOL and MATIC. This revision could lead to delays in rulings on whether these tokens are unregistered securities. As a result, XRP traders are optimistic that the SEC might ease its stance against fintech firm Ripple as the lawsuit moves closer to resolution.
Another significant development in the XRP ecosystem is the scheduled release of 1 billion XRP tokens by Ripple in August. This move is part of Ripple’s strategy to maintain transparency in releasing its holdings, dating back to 2017 when the company allocated 55 billion XRP tokens into escrow accounts. The upcoming token release will inject approximately $641 million worth of XRP into the market based on current prices. While increasing the token supply typically leads to a price decrease, some argue that it could actually boost an ongoing bullish trend due to increased liquidity.
Chris Burniske, partner at venture capital firm Placeholder, and former crypto lead at Ark Invest, emphasizes the impact of large token unlocks on market psychology. He explains that such events can act as bullish catalysts in a bull market and bearish catalysts in a bear market. This observation highlights the complex dynamics at play when it comes to token unlocks and their influence on market sentiment.