Alert: 1 Billion XRP Unlock Sparks Price Drop! Crisis or Opportunity?

Ripple on schedule released 1 billion XRP from its custodial account on December 1st. Based on the price at that time, this batch of tokens was worth over $2 billion.

Meanwhile, according to Gate data, as of December 12th, XRP price was $2.0048, down 4.118% in 24 hours, breaking below a key psychological level.

The market’s immediate reaction was negative: following the unlock news, XRP price remained under pressure, briefly dropping to a low of $1.993, and consolidating around the critical support level of $2.00.

01 Unlock Event and Latest Price Movements

On December 1, 2025, Ripple resumed its scheduled monthly unlock program, releasing 1 billion XRP from custody.

This event is part of Ripple’s long-term operational mechanism, aimed at providing predictable liquidity for the ecosystem rather than sudden sell-offs.

However, the market response was quite evident. According to Aastocks data, as of December 11th, XRP traded at $2.0048, down 4.118% in 24 hours, well below its 50-day simple moving average of $2.30 and the 200-day SMA of $2.62.

More detailed technical analysis shows XRP has broken below key support levels of $2.10 and $2.05, currently testing the important psychological threshold of $2.00.

If this level is lost, further declines could target $1.9850 or even the $1.920 region.

02 Unlock Mechanism Analysis: Not All Tokens Enter the Market

Market concerns about the unlock event mainly stem from fears of a sudden increase in supply. But in reality, Ripple’s custodial unlock mechanism is carefully designed to minimize market impact.

Based on Whale Alert tracking data and Ripple’s usual practice, after the 1 billion XRP is unlocked, a significant portion is typically quickly re-locked into custodial accounts.

For this December unlock, shortly after the initial transfer, Ripple returned 700 million XRP to custodial accounts.

This means the net increase available to the market is only 300 million XRP, far less than the apparent 1 billion.

Ripple CTO David Schwartz explained: “They always release custodial tokens on the first day of each month. But custodial release does not necessarily mean you will see related activity on the ledger.”

This further clarifies the difference between custodial release and actual market supply.

03 True Impact on Price: Comparing History and Reality

Historically, Ripple’s monthly unlock events have not always had a unidirectional effect on XRP price. Past data shows that unlocks sometimes cause slight price dips (around 3-5%), but occasionally can be neutral or even lead to gains.

This variation mainly depends on overall market sentiment and external catalysts at the time.

The price decline after December’s unlock cannot be solely attributed to the event itself. The entire crypto market faced correction pressures during this period, with Bitcoin briefly dropping below $84,000, triggering risk-off sentiment.

XRP’s decline was largely part of this broader market trend.

Notably, after a brief dip, XRP quickly rebounded and briefly rose back to around $2.13. This indicates that market fears over unlock events are often short-lived.

What truly drives medium- and long-term price trends are more fundamental factors, such as regulatory developments, institutional adoption, and overall crypto market sentiment.

04 Technical Analysis and Key Price Levels

Current technicals for XRP show intense battles between bulls and bears at key levels. After breaking below $2.10 and $2.05, $2.00 has become the last critical support for bulls.

From volume distribution, data on Gate.io indicates that the $2.10 - $2.15 range has been confirmed as a strong resistance zone.

Within this zone, hourly trading volume once surged to 172 million, 205% above the daily average, indicating significant institutional distribution activity.

On technical indicators, the hourly MACD remains bearish, and RSI is below 50, suggesting relative weakness among buyers.

Analysts suggest that if XRP can hold the $2.00 support and break above $2.05 resistance, it could retest $2.10 and further challenge resistance levels at $2.15 and $2.22.

On the downside, if $2.00 support fails, $1.9850 will be the next line of defense, with more significant support around $1.920 and $1.880.

05 Market Divergence and Long-term Outlook

A notable phenomenon is the structural divergence in XRP’s market. Despite spot XRP ETFs continuously attracting institutional funds, with net inflows exceeding $170 million this week and total inflows surpassing $1 billion, these funds have not effectively pushed prices higher.

This “weak price, tightening supply” divergence suggests the market may be facing concentrated selling pressure at key resistance levels.

On-chain data also reveals similar contradictions. Exchange-held XRP reserves have decreased significantly over the past month, from $7.03 billion on November 10 to $5.70 billion on December 10, a reduction of $1.32 billion, or 18.83%.

This supply tightening is often seen as a bullish signal, as fewer tokens remaining on exchanges imply less available for sale.

However, in the current context, this supply reduction has not translated into price increases, implying the market may be waiting for clearer catalysts.

Long-term, Ripple’s custodial system is expected to last until around 2035 before depletion. This predictable supply mechanism provides transparency for investors and reduces market uncertainty.

With improving regulatory environments and increasing institutional adoption, XRP’s fundamentals are gradually improving.

Future Outlook

In the face of Ripple’s routine unlocks, XRP price is struggling at the critical support level of $2.00. The current price has broken through several key technical levels, with the latest quote at $2.0048.

But contradictory market data resembles an unsolved puzzle: on one hand, exchange reserves have evaporated over $1.3 billion in a month, indicating supply tightening; on the other hand, institutional ETF inflows exceeding $1 billion have failed to boost the coin’s price.

The market’s balance swings between panic-driven unlock narratives and calm on-chain data, ultimately pointing to a stark reality — what determines XRP’s fate is never the monthly release of 1 billion tokens, but the collective confidence of the entire crypto world in the future of the payment network.