XRP Faces Potential Downturn as Inverted V-Shape Pattern Signals Risk of Drop Toward $1.70

• XRP’s recent price movements show a concerning trend, as declining network activity and bearish indicators raise the prospect of further drops.

• Recent analyses indicate that XRP could descend toward critical support at $1.70 amidst increasing selling pressure.

• According to data from COINOTAG, the recent drop in daily active accounts highlights reduced transaction volumes, fueling bearish sentiment.

XRP faces potential decline to $1.70 as network activity plunges, with bearish indicators influencing market sentiment.

XRP’s Price Dynamics Indicate Looming Challenges

XRP (XRP) has been experiencing considerable volatility, particularly evident in its price action from late April through June. The formation of an inverted V-shaped correction pattern on the daily chart signals a potentially serious downturn for the asset.

This follows a robust increase where XRP jumped 62% from a low of $1.61 but met resistance around the $2.65 mark, resulting in a significant correction. Current price trends have led to concerns about a possible further decline to the established neckline of the pattern near $1.72, which suggests a looming 20% drop.

Technical indicators, including the relative strength index (RSI), are revealing persistent bearish momentum. The RSI has slipped from a peak of 68 down to 41 since mid-May, further substantiating the prevailing downtrend.

Market Sentiment Reflects Increased Bearish Pressure

The latest analyses from market experts reflect a consensus that XRP’s bullish momentum is dissipating. A well-known analyst, MasterAnanda, has highlighted that XRP’s failure to maintain its bullish channel amidst declining support levels raises significant red flags for traders.

MasterAnanda’s predictions exhibit caution, noting that the price may continue its descent toward $1.72, where potential support can be found. “The correction might not be over,” he cautioned, suggesting traders prepare for further volatility.

XRP’s Rising Bearish Divergence and Implications

The presence of a bearish divergence across XRP’s price and RSI adds another layer of complexity to its current market outlook. While XRP managed to reach higher price levels in recent months, the RSI has been in steady decline, indicating weakening momentum. Historically, such divergences have resulted in increased selling activity, as traders react to the diminishing strength of price rallies.

This divergence is particularly concerning as XRP continues to face resistance around the $2.50 to $2.65 range, suggesting that any rallies may be short-lived unless a significant reversal in market sentiment occurs.

Decline in Daily Active Addresses Signals Reduced Demand

The XRP Ledger’s network activity has witnessed a marked decline, further corroborating the bearish outlook. On-chain analysis from Glassnode reveals that daily active addresses have plummeted from a peak of 608,000 in March to a mere 31,200 currently, underscoring diminished user engagement and transaction volumes.

Moreover, the steady decrease in new addresses—from a high of 15,800 daily to just 4,400—suggests waning interest in XRP, which historically correlates with increased price stagnation or declines. Low transaction volumes hinder liquidity and can exacerbate market downturns, raising concerns among investors.

Conclusion

In summary, XRP’s current trajectory indicates a potential drop toward $1.70 driven by decreasing network activity and bearish technical indicators. The convergence of these factors, combined with trader sentiment, channel a cautious outlook for XRP’s near-term price movements. Market participants would do well to monitor these developments closely, as significant changes in either network activity or sentiment may profoundly impact the asset’s future.