-
Recent analysis indicates potential downside risks for XRP, with market trends suggesting a possible 25% price drop approaching significant support levels.
-
The significant accumulation of XRP at peak valuations raises questions about the sustainability of its recent upward momentum.
-
According to COINOTAG, “XRP’s onchain activity may be signaling a retreat, especially as historical patterns suggest vulnerabilities at current price points.”
This article explores XRP’s market dynamics, highlighting key indicators and onchain trends that suggest a potential correction, focusing on critical price levels.
XRP Faces Increased Downside Risk Amid Market Signals
The recent surge in XRP, exceeding 385% since late 2024, has drawn critical attention from analysts. Key metrics from platforms like Glassnode reveal that over 70% of XRP’s realized market capitalization was accumulated at inflated prices. This pattern hints at potential vulnerabilities as these recent buyers are less inclined to weather significant market corrections.
Market Metrics Indicate a Fragile Landscape
Examining the realized cap, notably within the 3-to-6-month coin age category, illustrates a growing concern. The substantial gains observed post-January 2025, when XRP peaked around $3.40, showcase a historically top-heavy market. This fragility is echoed in past trends, such as the dramatic drop experienced in December 2017 after similar accumulation patterns.
An analysis of the market structure indicates that as newer investors—characterized by their short-term holdings—enter at inflated levels, they are more sensitive to price fluctuations, which can intensify sell-offs. In 2021, XRP’s price behavior reflected similar dynamics, culminating in an 80% decline after speculative surges.
Decline in Active Network Addresses Raises Concerns
Since hitting a peak in March 2025, XRP’s active address count has plummeted by more than 90%. This substantial drop suggests diminishing transactional activity on the network, reverting to levels that might not support current price valuations.
Historical patterns reveal that falling onchain activity amid rising prices has often been a precursor to market corrections. The current scenario mirrors those observed in previous cycles, particularly in late 2017 and early 2021.
While not definitive, this decline could indicate a shift among XRP holders, from engaging in transactions to merely holding, thereby reducing the asset’s liquidity in the market.
Technical Analysis Suggests a Potential Price Retreat
Technical indicators reveal that XRP is currently consolidating within a falling wedge pattern, a formation often associated with bearish movements. Recent trading has struggled to breach the upper trendline of this wedge, a critical signal for traders assessing the health of the bullish outlook.
Current analysis of the weekly chart suggests that should this pattern persist, XRP may face downward pressure toward the lower trendline, which aligns with the 50-week exponential moving average (50-week EMA) near $1.76. This target represents approximately a 25% decline from recently observed levels.
Conclusion
With substantial market indicators pointing toward a potential correction, XRP faces challenges ahead. The blend of decreased activity and a top-heavy market structure suggests that careful observation of support levels, particularly near $1.76, will be essential for traders. As the landscape evolves, staying informed will be critical for navigating potential market shifts.
