XRP’s declining network activity and decreasing open interest signal reduced demand for the altcoin, leading to a price stuck below key trendlines. Over the last 30 days, XRP has consolidated within a tight range of $2.05-$2.33, with the $3.00 level remaining elusive.
The XRP Ledger’s network activity has dropped significantly over the past six months, with new daily addresses creating fewer than 4,000 on Thursday and daily active addresses plummeting to 34,360 from a 3-month high of 577,000. This decline in activity suggests reduced interest or confidence in XRP’s near-term outlook.
Historically, declining network activity has signaled upcoming price stagnation or drops, as lower transaction volume reduces liquidity and buying momentum. A similar scenario is unfolding for XRP, with open interest dropping by 30% to $3.89 billion from $5.53 billion, indicating investors are closing positions with the expectation of a lower price.
XRP’s inability to reach $3 is also reinforced by its weak technicals, as the price is stuck below key resistance zones and simple moving averages (SMAs). If XRP bulls do not push the price above the SMAs, it may consolidate below these trendlines for several weeks.
An analyst warns that if XRP fails to break above $2.25, it may sweep lower levels, potentially leading to a 45% drop toward $1.20. The RSI has also dropped to 51 from overbought conditions at 81 on Jan. 20, indicating increasing bearish momentum.
Conversely, some analysts believe XRP’s 200-day consolidation below $3 could be a precursor for a massive upward move to $10, similar to the one that preceded a strong breakout in 2017. However, this article does not contain investment advice or recommendations, and readers should conduct their own research when making a decision.
Source: https://cointelegraph.com/news/xrp-onchain-data-why-3-out-of-reach-for-now