When Judge Analisa Torres first ruled in July that XRP programmatic sales do not qualify as securities, the token price had surged. However, now that the euphoria over the ruling has worn off and the US Securities and Exchange Commission (SEC) has begun to fight back, the price of the coin is correcting downwards again, leading to a massive sell-off of the token.
Whale moves 29.3 million XRP to trade
The on-chain whale tracker has flagged an XRP trade that could signal bearish pressure on the cryptocurrency’s price. According to the post on X (formerly Twitter), a single whale moved a total of 29.3 million tokens to a centralized exchange. The total supply of tokens worth just over $15.13 million at the time were transferred to the Bitstamp exchange.
🚨 29,300,000 #XRP (15,130,884 USD) transferred from unknown wallet to #Bitstamphttps://t.co/DhcHkKNdzc
— Whale Alert (@whale_alert) August 24, 2023
While these types of large transactions are not new to the network, it is the very destination that has raised concerns among investors. When investors move tokens to centralized exchanges like Bitstamp, it is usually to sell their tokens. This is because centralized exchanges offer lower fees and deeper liquidity, which also helps mitigate the impact of the sale.
It is possible that the whale has already started selling the coins as the XRP price experienced a rapid dip around the time the trade was executed. But with such a large inventory, further sales could drive the price down further, with such selling pressure leading to a drop of as much as 20%.
With the XRP price already struggling, this bearish scenario becomes more likely, especially as the broader crypto market sees widespread negative momentum and Bitcoin struggles to recover. Another dip from here would easily drop XRP price towards the USD 0.48 area.
Token price struggles amid sell-off | Source: XRPUSD on Tradingview.com
Is all hope lost for the XRP price?
While the whale’s big $15 million move to Bitstamp is worrying, the bulls haven’t given up. A few hours after the transaction was first seen on the blockchain, a massive $1.5 million purchase of XRP was reported on the Bybit exchange.
🚀🔥 JUST IN: A whopping $1.5 million worth #XRP was scooped up in an instant 10 minutes ago! Those two green candles with huge wicks indicate something BIG. 📈 Brace yourselves, XRP fam – looks like a big pump is on the horizon! 🌊 Who else sees this? Drop… pic.twitter.com/o2gy965qqF
— WallStreetBulls (@w_thejazz) August 25, 2023
The big purchases led to two quick spikes in the XRP price, briefly reaching $0.5311 before moving back down. This means there is significant buying pressure on the digital assets, which could help offset whale sales.
Interestingly, the token is still above the 200-day moving average, suggesting bullish sentiment, at least over the medium term. So while a 20% drop can be expected as a result of the sale, the drop is unlikely to last until digital assets pick up again.