Back in July, Judge Analisa Torres declared that XRP programmatic sales should not be classified as securities. This ruling initially caused a rally in the price of the XRP token, as it provided clarity and relief to investors. However, as time has passed and the United States Securities and Exchange Commission (SEC) has begun to fight back, the euphoria from the ruling has worn off. Consequently, the XRP price is now correcting back downward, leading to massive sell-offs of the token.
A notable development that has put bearish pressure on the XRP price is a transaction involving a whale moving a total of 29.3 million tokens to a centralized exchange. The destination of this transaction, which was the Bitstamp exchange, has raised concerns among investors. Typically, when investors move their tokens to centralized exchanges, it is with the intention of selling them. Centralized exchanges offer lower fees and deeper liquidity, which makes it easier for investors to mitigate the impact of their selling activities.
It is possible that the whale has already started selling their XRP tokens, as there was a quick dip in the XRP price around the time of the transaction. With such a large stash of tokens, further selling could lead to a significant price fall, with sell pressure potentially causing a decline of up to 20%. This is particularly concerning considering the current struggles of the XRP price and the broader negative momentum in the crypto market. If the price continues to dip, it could easily reach the $0.48 territory.
Response from the Bulls
Despite the concerns raised by the large transaction, the bulls in the market have not remained passive. Shortly after the transaction was seen on the blockchain, there was a report of a massive buy of $1.5 million worth of XRP on the Bybit exchange. This significant buy activity led to two quick spikes in the XRP price, briefly reaching $0.5311 before retracing back downward. The occurrence of these spikes indicates that there is a considerable amount of buy pressure on the digital asset, which could help counterbalance the selling pressure from the whale transaction.
Although the XRP price correction and the bearish pressure resulting from the whale transaction are concerning, there is still a bullish sentiment in the market, at least in the mid-term. The fact that the token is holding above the 200-day moving average suggests that there is still optimistic sentiment among investors. Therefore, while a decline of up to 20% can be expected due to the selling pressure, it is likely that the price decline will not be prolonged, and the digital asset will eventually recover and pick back up.
The recent XRP transaction involving a whale moving a significant number of tokens to a centralized exchange has raised concerns and put bearish pressure on the XRP price. The potential sell-off of the tokens could lead to a decline of up to 20%, especially given the negative momentum in the broader crypto market. However, the buy pressure from other market participants, as evidenced by a significant buy activity, indicates that there is still bullish sentiment in the market. Although the price correction and bearish pressure are concerning, it is likely that the XRP price will recover in the mid-term, given its current position above the 200-day moving average. Investors should monitor the market closely to assess any further developments and potential buying opportunities.