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XRP, on the other hand, is one of the few cryptocurrencies that the community claims is more centralized than Bitcoin or Ethereum. This is because XRP is the native token of the Ripple protocol created and supported by the parent company of the same name.
Ripple itself owns the lion’s share of the XRP offering and has sold every rally across the bear market. But Ripple’s fortunes have changed since then, and the company recently revealed a $ 46 million repurchase of XRP in its third-quarter revenue.
Kim Chua, PrimeXBT’s lead analyst, believes this could give XRP a reason to bounce back from such stagnation and potentially overtake both Bitcoin and Ethereum.
The negative sentiment allows the accumulation range in Ripple to go on indefinitely
XRP, while maintaining the $ 0.25 level for consecutive months, plummeted on the XRPBTC trading pair. While other altcoins have started their long road to recovery against Bitcoin, which has almost returned to its all-time high, XRP continues to set new lows against BTC.
It’s not entirely clear what the reason behind the overly negative sentiment surrounding XRP is. The positive news headlines are barely moving the needle and cryptocurrency investors and traders have moved on to other projects that they believe is the next big thing.
It is not decisive whether it was the damage caused by the spike of over $ 3.50 that attracted investors who bought the top of the crypto bubble or years of Ripple executives who sold any chance of recovery. What is clear is that XRP has struggled against other cryptocurrencies.
Whales charge as Ripple buys back XRP, will demand match supply?
But while small fish investors sold their XRP to not miss the recent rally and instead went long on Bitcoin, there were signs that the whales were absorbing the sell and increasing their XRP holdings even despite the continued sell off.
Wallets with more than 10 million XRPs have increased by 10% in the past few days, while those with one million XRPs or more have increased by 20%. If there is an ongoing silent accumulation with smart money, eventually, the sale will end and a mark-up will occur.
The increase in buying from whales is believed to be due to large buyers securing support, according to Chua, potentially protecting their long-term positions by doubling. The backup may have finally arrived via an unsuspecting source: the Ripples themselves.
Ripple’s buyback program could lead to XRP recovery, says PrimeXBT’s Kim Chua
Ripple revealed on November 10 that it has begun to buy back XRP to support “healthy markets”. Speculation indicates that the company is attempting to generate interest in the altcoin by facilitating a rally.
Buying and consuming Ripple’s available supply could eventually swing the balance in favor of demand and rising prices. Ripple is also looking to generate interest by introducing a new XRP line of credit. Ripple revealed that they may perhaps continue to purchase XRP to support the product.
The XRP credit facility allows liquidity on demand customers to purchase XRP on credit from Ripple. Using ODL, XRP acts as a bridge between two fiat currencies, eliminating the need to pre-finance through a Nostro account. Ripple hopes to sell its monthly supply of 1 billion XRP to its partners and institutions directly OTC through the ODL program, rather than through an exchange.
Selling XRP in this way to an OTC final buyer reduces the selling pressure on the open market. ODL experienced strong growth in the second quarter of 2020, with transaction volume increasing 11x from $ 1.75 million to $ 32.55 million quarter-over-quarter. With institutional demand rising, it is not impossible that the billion in supply is ultimately not enough to satisfy demand sufficiently. Could this possibly be the reason for the XRP repurchase?
Trade XRP against BTC, dollar and more with PrimeXBT
To recap, not only has Ripple halted any internal XRP token sale on the open market, it has created an environment that relieves the selling pressure from the markets and even stratified into a buyback program where over $ 46 million has already been removed. of XRP offer the market.
If the buyback trend continues, combined with the big players continuing to hoard the XRP offer while the small fish continue to sell the crypto asset for Bitcoin, “a successful recovery in XRP may not be too far off,” according to Chua.
XRP is one of five cryptocurrencies traded as CFDs on the award winning PrimeXBT. The advanced trading platform allows traders to create a diversified portfolio of long and short positions on stock indices, forex, commodities, cryptocurrencies and more. Ripple trading is available against both USD and BTC pairs.
