XRP’s recent price movement indicates potential challenges as it struggles to hold the $3 mark, raising concerns about a further decline towards the $2.40 to $2.00 range. Technical analysis reveals that XRP has formed a descending triangle pattern since reaching a multi-year high of $3.66. This pattern is marked by a flat support level, with resistance tapering downwards.
The recent price movement, which saw a breakout above the triangle’s upper trendline, was misleading, as bulls were unable to maintain momentum above the $3 threshold. The inability to reclaim this critical support level, which aligns with the 50-day simple moving average (SMA), raises the risk of a drop to $2.70. Further down the line, the 200-day SMA sits at $2.50, with an eventual target of $2.06 if bearish trends continue.
Moreover, the daily chart also reveals a bear flag formation that forecasts a possible decline to as low as $2.40 if the support at $3 cannot be sustained. If XRP manages to reclaim the $3 mark, buyers could initiate a recovery strategy aimed at pushing the price above the flag’s upper boundary at $3.20, which could lead to further gains towards $3.40 and potentially back to $3.66.
Onchain data indicates that major investors, often referred to as “whales,” are actively offloading their XRP holdings. Recent statistics reveal that these large entities, holding between 1 to 10 million XRP, have decreased their supply to 6.79 billion XRP—a six-week low. In total, they have sold more than 160 million XRP tokens over the past fortnight, valuing approximately $476 million at current prices. This trend suggests that whales are anticipating lower prices in the near future, even amidst possible spot ETF approvals and Federal Reserve rate cuts.
Compounding the negative sentiment, XRP’s reserves on exchanges have spiked significantly. As reported by Glassnode, the XRP balance on exchanges rose by 665 million tokens, totaling 3.94 billion, indicating an increase in the supply available for selling, which adds to the downward pressure on prices.
Moreover, the XRP Ledger has witnessed a drop in network activity, as shown by the decline in daily active addresses (DAAs). Data reveals that DAAs have sharply decreased from a peak of 50,482 on July 18 to around 21,000 at present. Additionally, the number of new addresses created has fallen from a height of 11,000 to just 4,300. This dwindling activity can often signal waning interest and confidence in the asset, leading to potential stagnation or price decline.
Overall, the current landscape for XRP suggests a challenging road ahead. Investors are advised to stay vigilant and consider conducting thorough research as market conditions evolve.
