Will $1.3 billion worth of sales pour out? Will the price drop accelerate with Ripple's 1 billion XRP unlock?

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A massive volume bomb exceeding $1.3 billion is ready to flood the market. As blockchain payment company Ripple Labs has unlocked 1 billion XRP from its escrow account, market tension is rising, with concerns that additional selling pressure could be exerted on the already weakening price.

According to cryptocurrency media outlet Finbold on May 1 (local time), an analysis of on-chain data from the blockchain explorer XRPSCAN revealed that Ripple unlocked 1 billion XRP, worth approximately $1.37 billion, from its escrow account on that day. This release of volume occurred over four transactions, with the largest single amount being 400 million tokens valued at approximately $547 million. In addition, 100 million, 300 million, and 200 million tokens were sequentially unsealed.

Following this action, approximately 33.35 billion XRP, valued at about $45.69 billion, are understood to remain in Ripple's escrow account. The media analyzed that, based on practices over the past several months, the company is likely to re-lock 700 million of the released tokens back into escrow. However, the remaining 300 million tokens, worth approximately $411 million, carry the potential risk of entering cryptocurrency exchanges or OTC desks and being released as actual sell-offs.

Ripple has regularly used the proceeds from the sale of these unlocked tokens to build its core payment solutions, such as cross-border remittances. This is a strategic funding initiative to drive the mainstream adoption of the XRP Ledger ecosystem. Indeed, its value as a payment network has been consistently proven, with the International Finance Bank recently positively highlighting XRP's key role in financial infrastructure through an internal presentation.

However, a large-scale token unlock poses a significant burden on immediate market price defense. Finbold pointed out that this 1 billion XRP unlock coincided with the recent strong selling pressure from large wallet holders, or whales. It is analyzed that if the market circulation of XRP, currently around 61.68 billion, further increases and becomes diluted, it could further fuel investors' short-term bearish sentiment.

Reflecting the uneasy sentiment of investors, the token price has been unable to escape a downward trend. Over the past week, the XRP price has fallen by more than 4%, currently struggling to maintain its position around the $1.37 mark. With sustained selling pressure and concerns about increased circulating supply, the token's total market capitalization has also shrunk below $85 billion.

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