Although most cryptocurrencies are experiencing strong gains, some coins, including Ripple (XRP), are moving in the opposite direction. XRP opened the day down about 2%, and at the time of writing the token had recovered to a roughly 1.96% increase.
Ripple has been on a roller-coaster ride, so it is unsurprising that its price has remained largely unchanged over the past week and month, even as many other digital assets have doubled, tripled, or quadrupled in value.
This article examines the factors currently affecting Ripple’s price.
Why did XRP’s price drop?
Although XRP has shown occasional gains recently, those gains have often evaporated as quickly as they appeared. Today the token started with a decline, then partially recovered, and at the time of writing was up about 1%.
What factors are influencing Ripple (XRP)? Why hasn’t the price climbed even as many investors believe it’s altcoin season? Below we outline possible reasons for XRP’s weakness and focus on a recent development: the withdrawal of 1 billion XRP from an escrow account.
One billion XRP withdrawn from escrow
On the first day of the month, Ripple’s DLT service provider removed a record 1 billion XRP from its escrow account, with plans to release part of that supply into circulation.
It is routine for Ripple to withdraw a certain number of XRP from escrow on the first day of each month and then release some portion into the market. Historically, that process has not harmed XRP’s price. This month, however, the withdrawal appears to have had the opposite effect: XRP fell roughly 2% immediately after the removal.
WhaleStats, a major tracker of large crypto holdings, confirmed that the withdrawals occurred in two tranches of 500 million XRP each. According to WhaleStats and details released by Ripple, the tokens withdrawn early on April 1 had an aggregate value of about $811.39 million at the time.
Following the news, Ripple’s market capitalization fell to approximately $39.3 billion, and the coin ceded its sixth-place ranking to Solana.