Amid looming crypto market uncertainty, another batch of XRP tokens has been locked in escrow for the second time this week, according to data from on-chain tracking platform Whale Alert.
The data shows that 4,000,000 XRP, worth approximately $11.21 million, has been mysteriously locked in escrow.
While the source did not reveal the identity behind the transaction, speculators suggest that the move may have been executed by the San Francisco-based blockchain company Ripple, as it reflects one of the regular activities it undertakes to manage the circulating supply of XRP.
The action, which has stirred discussions across the crypto community, seeks to tighten the short-term supply of XRP, thereby fueling scarcity and potentially driving a price upsurge.
How will XRP respond?
The move comes at a time when XRP is trading in deep red territory, as panic selling increasingly floods the market, causing it to lose momentum and fall well below the crucial $3 mark.
Despite the rapid price rally experienced during the first week of October, the market suddenly flipped bearish, sparking fear and uncertainty among investors.
In a bid to stabilize the situation, the portion of XRP has been locked in escrow to reduce the circulating supply, aiming to ease selling pressure in the near term.
Earlier this month, Ripple unlocked 1 billion XRP tokens from its escrow accounts to fulfill its scheduled monthly release, boosting supply amid a significant price rally.
With two batches of 4,000,000 XRP returned to escrow for the second time this month, speculators suggest that Ripple may be retrieving some of its recently unlocked tokens to control circulation as demand has subsided substantially.
The move seeks to mitigate oversupply and protect the token’s value from further declines. Nonetheless, XRP has yet to respond significantly, as its price continues to slide.
Data from CoinMarketCap shows that XRP has fallen 3.72% over the last 24 hours, trading at approximately $2.79 at press time.
While the XRP token lock is expected to restore key support levels and provide stability, the move has sparked hopes for a potential price recovery among investors.