Ripple co-founder sells 50 million XRP, will the price crash?

When key figures in the crypto assets world make large-scale asset transfers, the market always stirs up a storm. In late July, blockchain data showed that a wallet associated with Ripple co-founder and executive chairman Chris Larsen transferred 50 million XRP (approximately $175 million) to an exchange, sparking heated discussions in the community and concerns among investors.

But does this transaction really mean bad news? Or is it an overreaction from the market? This article will comprehensively analyze from data, background, and technical aspects.

The scale of the sell-off is actually insignificant

XRP circulating supply: about 59 billion coins

Larsen sale ratio: only accounts for 0.085% of the circulating supply

Even if all 50 million XRP enter the market, it is just a drop in the bucket. More importantly, Larsen still holds about 2.5 billion XRP, indicating that he still has long-term confidence in the Ripple ecosystem.

Market Reaction:

On the day the news broke (July 25), XRP dropped by 14%.

Recover half of the decline within 48 hours

In the last 30 days, the XRP price has still increased by 44%.

This indicates that the market has completed the "stress test," and the sell-off has limited impact on the long-term trend.

The reason for the sell-off may be normal asset allocation

It is not uncommon for senior executives to reduce their assets, with common reasons including:

Diversify risk: Avoid having a single asset occupy too high a proportion.

Tax Planning: Locking in Some Gains After Asset Surge

Funding allocation: Preparing for future investments or debt repayment

Due to XRP's increase of 440% over the past 12 months, Larsen partially cashed out at a high point, aligning with financial planning logic rather than being fully bearish.

XRP fundamentals continue to improve

* Legal Negative Factors Lifted

In March and June 2024, Ripple reached a full settlement with the U.S. SEC in the lawsuit.

The restrictions on institutional adoption of XRP have been removed, opening the door for capital inflow.

* Stablecoin Business Expansion

A USD-backed stablecoin will be launched in December 2024.

Enhancing institutional trading liquidity through the XRP Ledger (XRPL)

* Technical Upgrade

Launch of EVM sidechain in June 2024

Ethereum developers can directly deploy smart contracts on the XRPL and settle using XRP.

These positive signals indicate that even with senior management reducing their holdings, the XRP ecosystem is still expanding rapidly.

Technical Analysis and Market Forecast

Short-term support level: 0.58 USD

Main resistance level: 0.65 USD

RSI Indicator: Neutral to Bullish, Still Room for Upside

If market sentiment continues to be optimistic, XRP is expected to test the $0.70 range in the coming weeks; if it falls below $0.58, it may retrace to $0.54 to seek support.

Conclusion

Chris Larsen's reduction of 50 million XRP seems shocking, but it actually represents a very small percentage and is a normal asset allocation behavior. Combined with favorable legal conditions, technological upgrades, and the expansion of stablecoin business, the long-term fundamentals of XRP remain robust.

For investors, rather than being frightened away by short-term sell-off news, it is better to focus on the key support and resistance levels of XRP and seize mid to long-term layout opportunities.