1.5 Billion XRP Drop: What’s Happening?

by

As an experienced crypto investor with battle-tested nerves and a keen eye for market trends, I find myself intrigued by the recent XRP price action, but also cautiously optimistic. While I’ve seen green candles dance across my screen like a digital bull run, I can’t help but notice the eerie silence from the on-chain activity.

Recently, XRP’s price action and on-chain data have displayed contrasting patterns, causing some uncertainty about its longevity. Although the price has experienced a substantial increase, the on-chain data paints a less positive picture. The sudden spike on the price graph suggests strong momentum, as XRP has managed to overcome a resistance zone from a descending triangle formation. This surge propelled XRP to approximately $2.63, demonstrating a noteworthy daily increase of 5.62% and hinting at a potential bullish trend.

Nevertheless, the data from the blockchain presents a more worrisome scenario. After December 2, there was a significant drop in the number of transactions, which had previously reached almost two million. Since then, activity has decreased significantly, with only one million transactions taking place. This substantial decrease is cause for concern. Additionally, the volume of XRP payments, which had been strong at around three billion, experienced a drastic reduction, falling below one billion in subsequent days. This trend seems to indicate reduced network use and decreasing utility.

Another crucial metric to consider is the number of active accounts. During the late November rally, active accounts soared above 100,000 but have now tapered off to below 50,000, further confirming diminishing user engagement. This decline in on-chain fundamentals hints that the price spike may not be fully supported by strong adoption or usage growth, which raises questions about its longevity.

Looking at the technical aspect, XRP is in a vulnerable spot right now. The immediate support level lies around $2.10, coinciding with the 50-day Exponential Moving Average, providing a safety net if selling pressure intensifies. On the flip side, $2.85 serves as a significant resistance point to keep an eye on for XRP to signal a bullish breakout successfully.

If the improvement in XRP’s price doesn’t coincide with an increase in on-chain measures such as transactions and network activity, its recent price surge may weaken, causing it to fall back towards support points. Therefore, it’s crucial for investors to keep a close eye on transaction volumes and network usage for indications of a stronger, more lasting uptrend. Although the current price rise looks promising, the absence of solid underlying support could potentially jeopardize XRP’s recovery process.

Read More

2024-12-17 17:28