Key Takeaways
During the recent bull run, the Ripple co-founder sold millions of XRP as the token reached a new all-time high, an action that didn’t reflect well publicly. The market-wide correction set XRP back 15% from its price a week ago.
Ripple [XRP] reached an all-time high of $3.65 on the 18th of July, according to Coingecko. This took the altcoin’s market cap to $215.2 billion.
At the same time, Ripple co-founder Chris Larsen appeared to be selling numerous tokens.
According to crypto sleuth ZachXBT, an address linked to Larsen had transferred out 50 million XRP (worth $175 million) since the 17th of July.
The transfers went to three exchange-connected recipients and two freshly created wallets.
As the token neared its all-time high, Larsen was spotted transferring $30 million worth of XRP to Coinbase, likely to sell.
The recent pullback across the crypto market added to the bearish short-term pressure on XRP.
In a post on CryptoQuant Insights, analyst Darkfost noted that the long liquidations were extremely high on Binance. On the 23rd of July, XRP dipped by 10.3%.
This caused a wave of long liquidations, wiping out nearly $7.3 million worth of long positions.
Rising exchange reserves and their implications
AMBCrypto found that the Exchange Reserve of XRP has been rising since May.
Data from CryptoQuant showed that XRP has risen from 2.75 billion XRP on the 6th of May to 2.98 billion XRP on the 24th of July.
A rising exchange reserve generally indicates a distribution phase, but this time, increased reserves accompanied an ATH.
The runaway bullish momentum in July saw the estimated leverage ratio rise dramatically. The liquidation forced in the past 24 hours has brought derivatives traders back to Earth.
CoinGlass data showed $25.33 million worth of positions liquidated in 24 hours, and $16.42 million were in long positions.
Overall, the co-founder’s selling and the market-wide correction imposed a short-term retracement on XRP.
The $2.9-$3 area remains a strong demand zone for XRP and a psychological support. Hence, it is likely that XRP could consolidate around $3 for a few days before climbing higher.
This would give the derivatives and spot market time to cool down.
