XRP with $1.4 Billion Supply to Be Released, Can It Defend the $1 Support Line?

▲ Ripple (XRP) ©

As the May 1st schedule for the release of $1.4 billion worth of XRP (Ripple) approaches, pessimism warning of a collapse below the $1 mark, coupled with severe technical bearish charts, is weighing heavily on the market.

According to Finbold, a cryptocurrency specialized media outlet, on April 27th (local time), Ripple will release 1 billion XRP into the market this Friday, as per its monthly escrow program introduced in 2017 to enhance transparency and predict supply. Based on the current trading price of $1.41, this amounts to a massive volume of $1.41 billion.

The likelihood of such a massive supply release immediately leading to a price crash is low. Typically, Ripple has controlled the circulating supply by re-locking 60% to 80% of the unlocked tokens into new escrow contracts. In fact, in March and April, the amount released into the market for operational purposes was only around 200 million to 300 million tokens, having a minimal impact on price volatility.

The real crisis, as pointed out by experts, lies not in the routine escrow release event but in XRP's precarious technical indicators. Despite strengthened fundamentals during a prolonged sideways market spanning over 12 weeks, the actual price movement has remained stubbornly bearish. The upward support line, which has been tenuously held for weeks, is facing a risk of a downward breach, and analysis suggests that if this line breaks, a brutal correction pushing the price below $1 could ensue.

From a technical perspective, XRP is currently stuck in the early stages of a macro Elliott Wave correction. With the second wave not yet complete, the primary defense line is set around $1.13. If even this support level breaks, the price could slide sharply into a liquidity zone between $0.90 and $0.73, with $0.73 being the last critical lifeline, coinciding with the 0.702 Fibonacci retracement on the 3-day chart.

In conclusion, the criteria for deciding whether to sell ahead of the unlock event are not the event itself, but rather an individual investor's target timeframe and risk tolerance. The media outlet diagnosed that as XRP repeatedly fails to break key resistance levels and the risk of falling below $1 increases, the current chart, on the verge of collapse, could be a strong sell signal for short-term traders to seriously consider reducing their holdings.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*