XRP sell-off persists while Ripple expands digital asset custody

Ripple (XRP) slips to trade at around $2.26 at the time of writing on Tuesday, mirroring the persistent risk-off sentiment in the broader cryptocurrency market. XRP’s technical outlook remains weak, weighed down by pressure in the derivatives market as total crypto asset liquidations hit $1.33 billion over the past 24 hours.

Ripple acquires Palisade in digital asset custody expansion move

Ripple has completed the acquisition of Palisade, a digital asset and custody company. According to the announcement on Monday, the move aims to expand Ripple’s custody capabilities, particularly for fintechs, crypto-native firms, and corporates.

Ripple Custody was initially designed to serve the interests of banks and financial institutions seeking platforms that provide safe and secure storage for digital assets, stablecoins, and Real World Assets (RWAs). 

Palisade’s integration allows Ripple Custody to broaden its offerings and use cases by bringing secure, fast, and scalable “wallet-as-a-service” technology, designed from the ground up to support high-speed value transfer.

“The combination of Ripple’s bank-grade vault and Palisade’s fast, lightweight wallet makes Ripple Custody the end-to-end provider for every institutional need, from long-term storage to real-time global payments and treasury management,” Monica Long, President of Ripple, said.

Ripple Payments will directly integrate Palisade’s technology to complement existing use cases. With this integration, Ripple will expand its services to offer subscription-based payments and value collection by facilitating high-speed transactions at scale.

Ripple has been aggressively expanding its product suite through strategic acquisitions, including the purchase of prime broker Hidden Road, now known as Ripple Prime, and GTreasury, a treasury management system provider. Ripple’s investment in the crypto ecosystem has topped $4 billion this year, according to the blog post.

Despite Ripple’s efforts to expand its investment in the crypto ecosystem, XRP continues to face selling pressure, falling by nearly 38% from its record high of $3.66 reached in mid-July.

The sell-off in the broader cryptocurrency market has accelerated risk-off sentiment, as traders seek alternative investments. CoinGlass data shows the OI-weighted funding rate at -0.0019%, down from 0.0085% on Sunday. The sharp drop suggests traders are intentionally closing their long positions and piling into short positions, thereby depriving XRP of the tailwind needed to sustain its recovery.

XRP OI-Weighted Funding Rate | Source: CoinGlass

Crypto liquidations average $1.33 billion over the past 24 hours, reflecting the negative sentiment gripping investors. Of this, $1.17 billion is in long positions, with approximately $156 million of shorts wiped out. If traders don’t see a lifeline in the coming sessions, liquidation may continue wreaking havoc in the crypto market.

Crypto liquidation data | Source: CoinGlass

Technical outlook: Can XRP sustain recovery?

XRP is trading at around $2.26 at the time of writing on Tuesday. The token’s position below key moving averages, such as the 200-day Exponential Moving Average (EMA) at $2.59, the 50-day EMA at $2.62, and the 100-day EMA at $2.69, suggests a bearish technical structure.

The Moving Average Convergence Divergence (MACD) indicator on the daily chart triggered a sell signal earlier in the day, calling upon investors to reduce their exposure. Recovery could be an uphill task if the red histogram bars below the mean line expand.

Furthermore, the Relative Strength Index (RSI) is at 36 and falling on the same daily chart, indicating that sellers have the upper hand.

XRP/USDT daily chart

Key areas of interest for traders are the next support at $2.18, last tested on October 18, and the area at $1.90, previously tested in June. If sentiment shifts positively, investors buy the dip, and a reversal could occur toward the 200-day EMA at $2.59 and the 100-day EMA at $2.69.