Ripple unlocked approximately 1 billion XRP from escrow on February 1. This is in accordance with a long-standing monthly unlocking schedule.
The scheduled unlock continued with XRP closing weaker in January. Tokens dropped by over 10%. Selling pressure persisted into February. Coupled with the overall market downturn, prices fell further.
Ripple unlocks 1 billion XRP from scheduled escrow
According to on-chain data, the unlock occurred in four phases of 100 million, 400 million, 100 million, and 400 million XRP. The total value at the time of execution was approximately 1.6 billion dollars.
Ripple's monthly unlock is not an unpredictable event but part of a structured supply management approach. This system, introduced in 2017, allows for 55 billion XRP to be placed in escrow and a maximum of 1 billion XRP to be unlocked in a transparent and predictable manner each month.
In this framework, Ripple typically locks 60-80% of unlocked tokens back into escrow. They hold only a portion depending on operational costs or liquidity needs. This pattern has repeated this month as well.
LookOnChain (Whale Alert) reported that Ripple has re-locked 400 million and 300 million XRP into escrow in two transactions. This totals 700 million XRP, equivalent to approximately $1.09 billion. As a result, there are 300 million XRP left after this monthly unlock.
XRP hits October low amid cryptocurrency downturn.
Historically, such monthly escrow movements have had limited immediate impact on the market. However, with a recent decline in risk appetite across the market, XRP is also under pressure.
According to BeInCrypto market data, XRP dropped by 10.6% in January, falling to $1.50, marking its lowest point since the market crash last October.
In February, XRP has already dropped more than 6% in just two days. It followed the trend of Bitcoin and Ethereum falling to their lowest levels in months. At the time of writing, XRP was priced at $1.57 and had dropped nearly 5% over the past 24 hours.
Amid the ongoing decline, analysts are divided on which is more likely: recovery or further decline. One analyst stated that XRP could repeat its familiar long-term cycle, suggesting that the next major rally could come years later.
According to analysis, XRP has generally rebounded strongly after going through long adjustment phases in subsequent cycles.
"It follows the same pattern in every cycle. The next pump will not happen until Q4 2028, above $8-$10," the analyst wrote.
Another analyst stated that XRP is currently consolidating at a bottom in a 're-accumulation phase.' This could be preparation for a long-term upward reversal.
Meanwhile, David Schwartz, one of the key designers of the XRP Ledger (XRPL), has challenged the optimistic price targets circulating in the XRP community.
"I don't think it's likely, but I also didn't think XRP would reach $0.25. It felt crazy to start selling XRP at $0.10. I remember thinking it was an impossible dream for Bitcoin to reach $100," he wrote.
Schwartz argues that if a rational investor believes there is a 10% chance that XRP will reach $100 within a few years, that token will not remain at its current price level. According to his perspective, such investors will not sell below $10 and will rather start buying, quickly exhausting the remaining supply.
"The fact that the current trading price is far below $10 shows that there are hardly any people who believe in a 10% chance of reaching $100 within a few years and are confidently putting in funds. Those who say otherwise are not speaking the truth." - Schwartz.
This perspective starkly contrasts with the optimistic outlook commonly spread in the cryptocurrency industry. This claim suggests that market prices may better reflect the actual agreed-upon views than more optimistic social media predictions.