Crypto pundit Diana has explained why not every XRP investor will be able to sell at the top, even as the community awaits higher prices. The pundit alluded to a liquidity shortage and how there might not be enough demand as everyone tries to offload their coins at the same time.
Why Not Every XRP Investor Will Be Able To Sell At The Top
In an X post, Diana echoed Jake Claver’s statement that a lot of exchanges won’t have the liquidity to let XRP holders exit at the market value. The pundit remarked that many token holders won’t be able to just cash out if the price rises to, like $10. She explained that this is because if too many people try to sell at once, the market doesn’t have enough buyers ready to take all those orders at the same price.
Diana noted that this is a result of thin liquidity. As such, those looking to sell at $10 might have their order filled at $8.50. She added that this is what is known as slippage and that it could cause investors to lose thousands in a few seconds. The pundit also gave an illustration of how the rush to sell during parabolic rallies is just like when everyone is trying to leave through the same door when the fire alarm goes off during a concert.
In this case, the liquidity is like the door, and it won’t be able to accommodate everyone. Diana stated that the issue of liquidity matters more for XRP because while retail traders use Coinbase or Kraken, banks, hedge funds, and corporations don’t. Instead, she claimed that they trade off-exchanges through private deals called OTC trades.
The pundit further remarked that with Ripple’s $1 billion acquisition of GTreasury, more XRP liquidity is about to move off crypto exchanges and into corporate systems. She noted that this is great for real-world adoption, but that it means that there will be less of the altcoin available on public markets when everyone tries to sell.
What Holders Should Do
Diana advised XRP holders to plan ahead, as when the next XRP bull run hits, prices could surge higher than ever, but cashing out won’t be simple. As part of the plan, she told investors to move their tokens off crypto exchanges now and set their sell targets early. The pundit added that holders should use limit orders instead of market orders.
Diana stated that when the altcoin finally goes vertical, the winners won’t be those who timed the top but those who were ready for it. Jake Claver, CEO of Digital Ascension Group, had also warned XRP holders that without custody, tax strategy, and wealth infrastructure before the liquidity event, many would fumble to generate wealth.
At the time of writing, the XRP price is trading at around $2.42, down in the last 24 hours, according to data from CoinMarketCap.
Featured image from Peakpx, chart from Tradingview.com
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