Ripple (XRP) price has continued to trade lower in the recent days with the price action now dipping below the key bull/bear line at $0.50.
Fundamental analysis: Co-founder of Ripple dumped $86.8 million in XRP on the open market this month
Jed McCaleb, co-founder of Ripple and Stellar has sold 157.9 million XRP ($86.8 million) on the open market during the period between December 1 and December 9.
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Not long before the sale, McCaleb received a 266.3 million XRP payment. XRP’s price plunged by 6% after McCaleb’s sale. After he founded Ripple, McCaleb left the Ripple team in 2013 and announced he was holding 9 billion XRP that he plans to sell on the open market and donate to charity.
In that same announcement, McCaleb said two of the other Ripple co-founders were entitled to a total of 11 billion XRP while the founding members donated the remaining 80 billion XRP to the company.
What’s even more surprising than McCaleb’s subsequent sales of XRP is the amount that Ripple Inc. holds and the fact that they dump the coin on the open market themselves. The company dumps millions of dollars in XRP every quarter. Ripple says it does this to keep the company profitable.
Ripple reportedly owns about 50% of all XRP in circulation, which raises concerns among many investors who think that owning nearly a majority of all XRP and selling substantial amounts of it on the open market each quarter could significantly hurt the economics and the market value of the cryptocurrency.
However, the company has recently started buying XRP back each quarter in a bid to prevent any negative effects on the cryptocurrency.
“Ripple is purchasing – and may continue to purchase – XRP to support healthy markets,” said Ripple Inc.
Technical analysis: Major support level broken
XRP/USD price is trading around the $0.46 handle after breaking lower to push the ongoing correction to over 60% and erase more than half of recent gains. The correction also facilitated a move below $0.50, which is seen as a key milestone for both buyers and sellers.
However, the sellers couldn’t go past $0.44, where 61.8% Fibonacci retracement is located. Looking higher, XRP buyers are likely to target a quick return to $0.50.
One of the founders of Ripple, Jed McCaleb, has dumped 157.9 million XRP ($86.8 million as of press time) on the open market from December 1 to December 9. In the meantime, Ripple price has fallen over 60% since the recent highs.