- Ripple has injected 1 billion new XRP tokens into the circulating supply.
- XRP price currently hovers over a historical trendline dating back to March 2021.
- Invalidation of the downtrend scenario is a breach of above $0.43.
Ripple's recent injection of new tokens into the market could be the straw that breaks the camel's back.
XRP price signals a whale dump
XRP price currently auctions at $0.33 as the bears have suppressed the digital remittance token into a historical barrier dating back to March 2022. The bears have controlled the trend, shorting the Ripple price in a star-step-like fashion. Based on previous forecasts, the technicals suggest a breach of the 13 swings low near $0.30 will likely occur.
Just today, Ripple Santiment's Supply Distribution indicator saw an uptick of 1 billion new XRP tokens. The influx of tokens brings the total supply back to 40 billion. The last time 40 billion tokens were in circulation, XRP price traded sideways near $1.20 before losing 50% of its market value a week later.
Sanitment's Suppy Distribution Metrics Indicator
Regardless of Ripple’s intentions with the tokens, the inflation festers with basic supply and demand principles. With more tokens in circulation, there is more potential for institutional selling. This recent occurrence could be the catalyst to induce the large sell-off that the technicals have been suggesting.
Nonetheless, traders should be very wary about entering the market a short too soon. A daily close above $0.33 could induce a 12% rally targeting $0.36. This will not invalidate the overall bearish thesis but finding an entry is what separates traders from the spectators. Invalidation of the bearish thesis targeting $0.28 is above $0.43.
In the following video, our analysts deep dive into the price action of Ripple, analyzing key levels of interest in the market. -FXStreet Team
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