Over the past quarter, the number of active Ripple (XRP) addresses has seen a significant drop, sparking concerns regarding the diminishing network engagement and its potential impact on price movements.
This decline in user interaction has coincided with a broader market correction, sparking speculations about the future direction of XRP.
Decrease in XRP Active Addresses and Market Sentiment
According to data from Glassnode, the number of active XRP addresses reached its peak in early December 2024 before embarking on a gradual decline. At its peak, the number surpassed 203,000 addresses.
The most recent data indicates a notable decrease in active wallets, typically suggesting lower transaction volumes and reduced market involvement. Currently, the number stands around 82,000, signifying a drop of over 50%.
In the past, sustained decreases in active addresses have often been associated with price stagnation or downward trends, indicating waning interest from investors.
Price Movement and Technical Signals
XRP has been following a bearish trajectory in line with the declining network activity. A clear head and shoulders pattern is visible on the 12-hour chart, a classic indicator of a bearish reversal. This pattern implies that XRP might continue its downward movement if critical support levels fail to provide adequate backing.
Currently, XRP is trading at $1.9939, reflecting a 9.23% decline over the past 24 hours.
The 50-day Moving Average (MA) is $2.5019, considerably higher than the current price, pointing towards sustained selling pressure.
Simultaneously, the Accumulation/Distribution (A/D) indicator displays a downward trend, strengthening the notion that major holders are offloading their positions rather than accumulating more.
Implications for XRP’s Future
Given the declining network participation and the prevailing bearish price trend, XRP urgently needs a surge in active addresses to initiate a recovery phase. Failure to witness an increase in active addresses might subject XRP to further downward pressure, potentially testing the $1.80-$1.85 support range next.
However, a substantial uptick in active addresses could indicate a restoration of investor confidence, potentially stabilizing prices and paving the way for a reversal. To set a bullish outlook, XRP must successfully reclaim the $2.20-$2.25 range, which acts as a crucial resistance zone.
Wrapping Up
The ongoing downtrend in both active addresses and prices serves as a cautionary signal for XRP investors. Regular monitoring of on-chain activities will be pivotal in determining whether the asset is heading for further declines or if a turnaround is imminent.
Until a notable improvement in network activity occurs, XRP remains vulnerable and heavily reliant on a resurgence in user engagement to propel it towards upward momentum.