While the global crypto market is currently experiencing another round of rallies, XRP has continued to decline in value. Over the past 24 hours, the asset has plummeted by over 5% slumping below a high seen as of March.
The global crypto market on the other hand has remained in green over the past 24 hours as top cryptos like Bitcoin and larger altcoins such as Ethereum (ETH), Cardano (ADA), and Solana (SOL) have recorded an increase in value over the same period.
XRP Plummets 5%, Why?
Prior to today’s price action recording a bearish trend, in the past 7 days, XRP has been in the green. The asset surged by nearly 20%. XRP moved from a low of $0.44 as of March 25 to trade as high as $0.57 on March 29.
Interestingly, amid XRP’s bullish moves was when the global crypto market was experiencing a retracement after a successful rally at the beginning of March. Between March 25 to April 1 when XRP surged 18%, large crypto assets such as ETH and BTC have only moved 3.2% and 4.4% respectively.
Over the past 24 hours, the XRP is now down by 6%, with a trading price of $0.51, after it already spiked above that price range in the past 3 days. In the past 24 hours, nearly $2 billion have been removed from its market cap. At the time of writing, it’s market cap value sits at $26.3 billion as opposed to the $27.5 billion seen at the start of today.
So far, XRP’s latest bearish move can be attributed to just two factors. One which is because large investors may be taking profit as the asset has not only broken multiple resistance in the past 7 days but has also triggered several take profit orders.
In addition, as of earlier today, San Francisco-based crypto heavyweight Ripple Labs made another release of its monthly escrow process. On March 1, four XRP transactions, carrying 2 x 400,000,000 and 2 x 100,000,000 XRP were noticed by an XRP-based escrow bot.
Though out of every monthly release only a small amount goes into circulation as the company conducts a re-escrow whereby it locks the tokens for release in the coming first month. However, this can still be attributed to XRP’s latest price action.
This is because even the small amount released into circulation is enough to impact the asset’s market if there is low demand compared to the increased supply. The XRP escrow process is a mechanism introduced to provide additional predictability to the XRP supply.
According to the company’s website, “Ripple has locked 55 billion XRP (55% of the total possible supply) into a series of escrows.” These escrows are built on top of the XRP ledger whereby ledger mechanics, enforced by consensus, control the monthly release of the XRP.
“The escrow consists of independent on-ledger escrows that release a total of one billion XRP each month over the next 55 months. This provides an upper limit on the amount of new XRP that can be brought into circulation,” said Ripple.
Global Crypto Market Stay In Green
Meanwhile, the global crypto market is currently enjoying a bullish move amid XRP’s decline. Over the past 24 hours, Bitcoin and Ethereum have surged nearly 2%, respectively. In contrast, larger altcoins by market capitalization have also stayed in the green.
In the past 24 hours, Dogecoin (DOGE), Polygon (MATIC), and Solana (SOL) have moved sideways on the price chart surging by 2.5%, 1.9%, and 3.5%, respectively.
