XRP price dipped slightly to $2.51 on Thursday after reaching $2.65 on Wednesday. The two-week uptrend, supported near $2.12, reflects the broader crypto market's bullish sentiment, driven by strong fundamentals including eased trade tensions between the US and China. However, a decline in XRP's network growth suggests reduced user participation, which could dampen the mid-term upward trend targeting the psychological resistance level of $3.00.
Positive developments in US-China trade negotiations have contributed to improved global market sentiment. Crypto markets, alongside traditional assets, continue to rebound from early April’s tariff-induced slump, buoyed by favorable inflation data.
XRP Rally Loses Momentum Amid Declining Network Activity
The XRP Ledger is presenting mixed signals. Key on-chain metrics indicate that network activity has been consistently declining since January. The number of new addresses created daily has fallen significantly, suggesting a potential cooling of interest.
This drop in network growth implies reduced new user adoption and lower engagement, which often correlates with weakening demand. Historical data indicates that such a slowdown can precede price consolidation or pullbacks, as visible in XRP’s price action since its January peak near $3.40.
Simultaneously, the price of XRP is fluctuating around $2.53, accompanied by a spike in liquidations in the derivatives market. Over the past 24 hours, total liquidations surpassed $10 million. Long positions accounted for the majority—reaching $8.44 million—while short liquidations stood at $1.69 million.
The increase in long liquidations, coupled with a decline in open interest and trading volume, points to cooling speculative activity. Trading volume has decreased from around $19.5 million earlier in the week to approximately $8.69 million, indicating tightening liquidity. This could heighten volatility, especially if traders continue to adjust their positions, adding selling pressure.
What’s Next: Can XRP Reignite Its Rally Toward $3?
XRP price remains well above key moving averages, including the 50-day, 100-day, and 200-day Exponential Moving Averages (EMAs). Despite a minor pullback from Wednesday’s high of $2.65, the token continues to show relative strength.
The Moving Average Convergence Divergence (MACD) indicator remains above the centerline, issuing a buy signal supported by a green histogram. This underscores sustained bullish momentum and suggests that interest in XRP remains elevated, with expectations that the uptrend may eventually resume toward $3.00.
Traders should, however, consider the possibility of further downside in the near term. The Relative Strength Index (RSI) is currently at 63.34 and trending toward the midline of 50, highlighting weakening upward momentum.
Should the decline continue, it could be accelerated by profit-taking. Immediate support levels are situated between the 50-day EMA at $2.27, the 100-day EMA at $2.25, and the 200-day EMA near $2.00.
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Frequently Asked Questions
What is causing the current XRP price decline?
The dip is influenced by a combination of broader market slowdown, decreasing network growth, and a rise in long liquidations. These factors indicate reduced momentum and potential profit-taking by traders.
How does network activity affect XRP’s price?
Network activity, measured by new address creation and transaction volume, is a key indicator of user adoption and demand. A decline suggests lower engagement, which can negatively impact price momentum over time.
What are the key support levels for XRP?
Critical support levels are located at the 50-day EMA ($2.27), the 100-day EMA ($2.25), and the 200-day EMA ($2.00). These may serve as buffers against further declines.
Can XRP still reach $3?
While the short-term trend shows resistance, the overall bullish structure remains intact. A resurgence in market sentiment or positive network developments could reignite the move toward $3.
What tools can help monitor XRP market trends?
Traders often use technical analysis indicators like MACD and RSI, along with on-chain metrics such as network growth and liquidation levels. For a comprehensive view, explore 👉 advanced market analysis tools.
Is now a good time to invest in XRP?
Market conditions are mixed. While the long-term outlook may still be positive, potential investors should conduct thorough research, assess risk tolerance, and consider waiting for clearer signals or stronger support levels before entering positions.