XRP, one of the prominent cryptocurrencies on the market, is experiencing a significant downturn, along with the broader crypto sector. Over the course of just a few days, XRP has witnessed a substantial decline in its market capitalization, shedding more than $1 billion. This trend has raised concerns among investors, despite efforts by Ripple to increase liquidity through its escrow system.
XRP Market Cap Decline
As of September 4, XRP market cap stood at a robust $26.58 billion. However, the latest data from CoinMarketCap, as of September 11, shows that it has fallen to $24.98 billion.
This drop of $1.6 billion in market capitalization within a week underscores the ongoing volatility in the crypto markets.
XRP price analysis
The price of XRP has also taken a hit during this period, currently hovering around $0.4716. This represents a 4.79% decrease in the last 24 hours, a 5.62% decline over the past seven days, and a substantial 24.53% loss on the monthly chart.
For traders and investors, it’s crucial to be aware of key price levels. At the time of writing, the strongest support level for XRP is approximately $0.485051, while the strongest resistance level is at $0.514243. These levels can provide important insights into potential price movements.
Unlocking and relocking XRP tokens
The recent slump in XRP’s value coincided with Ripple’s decision to unlock one billion XRP from its escrow system on September 1. Ripple has used this approach since 2017 to introduce new tokens into circulation and enhance XRP liquidity.
However, in an effort to address concerns and stabilize the market, Ripple relocked 80% of the previously unlocked tokens (800 million XRP) into two separate escrows on September 5, retaining 200 million XRP for potential future use.
This move has generated speculation about how the release and relocking of tokens will impact XRP’s price in the short term.
Investors and analysts will be closely monitoring the situation to gauge whether these efforts by Ripple will help stabilize the value of XRP in the midst of the crypto market’s ongoing turbulence.