Ripple Token Unlock Sees Release of 1 Billion XRP Amid Surge in Institutional Inflows

Ripple Token Unlock Sees Release of 1 Billion XRP Amid Surge in Institutional Inflows
The recent Ripple token unlock, releasing 1 billion XRP on October 1, has injected fresh liquidity into the market just as institutional capital flows surge. While the scheduled event boosted market activity, attention has shifted to how this influx could influence XRP’s price amidst growing uncertainty surrounding the SEC’s ongoing appeal. As traders analyze the implications of both the unlock and the regulatory battle, XRP’s price trajectory hangs in the balance.
Ripple Token Unlock Capital Inflows
The October 1 token unlock added to the total circulating supply of Ripple (XRP), putting pressure on the price in the short term. Despite this, CoinShares’ Digital Asset Fund Flows report revealed an influx of $300,000 into XRP-based funds last week, signaling heightened institutional interest. In stark contrast, Bitcoin and Ethereum funds saw substantial outflows during the same period, with Bitcoin recording $159 million in outflows and Ethereum losing $28.9 million.

The capital inflows into XRP-based funds amidst a bearish crypto market suggest that institutional investors are seeing potential in Ripple’s ecosystem. It’s a positive sign for XRP that we’re seeing this level of capital inflows, especially as other major assets are experiencing outflows, says Thomas Lee, co-founder of Fundstrat Global Advisors. This shows confidence in Ripple’s long-term strategy, despite the challenges posed by the SEC.
The Ripple token unlock on October 1 released 1 billion XRP tokens into the market, causing ripples in the market as traders grappled with the potential supply shock. Historically, these unlocks have created downward pressure on the price of XRP due to the sudden increase in circulating supply.
However, the October 1 Ripple token unlock has so far been mitigated by the positive market sentiment generated by the inflow of institutional capital. XRP rose nearly 2% after the token release, trading above key support levels at $0.5200. At the time of writing, XRP is holding at $0.5430, maintaining a bullish trend despite the challenges posed by the token unlock and the broader crypto market downturn.
SEC Appeal Adds Complexity to Ripple’s Future
The SEC’s ongoing lawsuit against Ripple token unlock has been a central narrative for the company and its investors over the past few years. On October 3, the SEC appealed a ruling that imposed a $125 million fine on Ripple for the sale of XRP tokens to institutional investors. The appeal has added a layer of uncertainty, yet traders seem to be digesting the news as they continue to invest in XRP despite the legal battle.
The SEC’s appeal is definitely a cloud hanging over Ripple’s prospects, but the market has had time to factor in the risks associated with this lawsuit, notes Scott Melker, also known as “The Wolf of All Streets, a popular crypto trader and market commentator. Ripple has shown resilience and continues to attract capital despite regulatory challenges.
From a technical standpoint, XRP faces a critical moment. The altcoin has been on a downward trend since July 2023, and the release of the 1 billion tokens could potentially exacerbate this if XRP fails to break through key resistance levels. According to Mourya’s analysis, XRP could extend its losses by another 7%, potentially falling to $0.5026, a significant support level coinciding with its September 6 low.
The Moving Average Convergence Divergence (MACD) indicator also suggests negative momentum in XRP’s price, with red histogram bars pointing to further downside potential. However, the daily close above the 200-day Exponential Moving Average (EMA) at $0.5548 could invalidate this bearish thesis, opening the door to a potential rally toward $0.6000—a psychologically crucial level.

A break above the 200-day EMA could see XRP regain bullish momentum, but it all depends on whether the token can absorb the supply from the recent unlock and maintain strong buying support,” adds Mourya.
Ripple’s strategy of using token unlocks to support its operational and investment goals has been met with mixed reactions. While some traders are concerned about the potential price impact of increasing the circulating supply, others view the unlocks as necessary for the continued development of Ripple’s ecosystem.
Ripple CEO Brad Garlinghouse has emphasized that the company’s long-term vision includes expanding the use of XRP in cross-border payments and increasing its adoption as a bridge currency for financial institutions. Garlinghouse recently stated, “The recent inflows into XRP-based funds are a testament to the market’s belief in our vision for the future of digital payments.”
Ripple’s October 1 token unlock and the subsequent capital inflows suggest that the market is closely watching the asset for signs of further volatility or potential recovery. Institutional investors have shown increased interest in XRP, as evidenced by the $300,000 inflows into XRP-based funds. However, the ongoing SEC appeal and the token unlock could create short-term headwinds for the altcoin.

As the market continues to digest the implications of the token unlock and regulatory uncertainty, XRP traders will be closely watching key support and resistance levels. If XRP can break through the 200-day EMA, it could signal the start of a new bullish phase for the altcoin.
Ripple’s long-term strategy remains focused on expanding the utility of XRP within the financial ecosystem, and the recent inflows suggest that investors are confident in the company’s ability to execute this vision. However, with the SEC appeal still unresolved, XRP’s future remains uncertain. Get more from The Bit Gazette