The combination of XRP’s weak technical structure and declining on-chain activity is not conducive to its recovery.
Will momentum return?
XRP is still having trouble below its major moving averages on the price chart. Once again, price attempts to regain short-term bullish momentum have been thwarted by the 50 EMA. For the time being, the asset is clinging to a small upward trendline, but that support appears to be getting weaker.
XRP is compressing under resistance rather than strengthening, which usually resolves to detrimentally when no potent catalyst emerges. The underlying network metrics are not supporting this at the same time. According to recent data, there has been a significant decline in the quantity of payments made on the XRP Ledger when compared to previous peaks.
More significantly, the number of active accounts has also drastically decreased, suggesting a decline in network participation. When the number of transactions and active users declines simultaneously, it indicates a decrease in actual usage rather than merely transient noise.
XRP's network activity going down
This is significant because the story of XRP has always been linked to network and utility throughput. One of the main justifications for ongoing demand is eliminated when those metrics decline. The price can temporarily disregard fundamentals, but not permanently — particularly on a market where technical weakness is already present.
The issue is the timing. XRP is not in a strong position to absorb negative data. It is currently losing on-chain momentum, in addition to already being in a downtrend and failing at resistance. The likelihood that the existing support structure will fail is increased by that combination.
Expectations for investors should change in line with this. This stage does not show signs of recovery. Rather, there are indications that the market is still under pressure. XRP is likely to return to lower levels if the rising support breaks, and the likelihood of a swift recovery is diminished by the lack of robust network activity.
Here, the alignment of signals is more important to trust than a story. Technical and on-chain indicators are currently pointing in the same direction, which is downward.
