- XRP remains stuck below $3 as declining network activity and a 30% drop in open interest reflect reduced investor confidence.
- Technical resistance and bearish chart patterns suggest a potential price drop toward $1.20 if support fails.
Despite hopes for a breakout, XRP has been trading in a narrow band between $2.05 and $2.33 for over a month. On-chain metrics and technical indicators now shed light on why the $3 mark remains out of reach—for now.
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XRP Network Activity Hits a Low Point
Data from Glassnode reveals that XRP Ledger’s network activity has significantly weakened. New addresses dropped sharply to just 3,500 on a recent Thursday, far below the January peak of 15,823. Similarly, daily active addresses fell from 577,000 to just 34,360. These drops indicate reduced user engagement and confidence, suggesting lower demand for XRP in the short term.
Historically, when XRP’s network sees declining participation, its price tends to either stagnate or fall, as reduced transactions limit liquidity and investor interest.
30% Drop in Open Interest Points to Investor Exit
Supporting the bearish case is a significant drop in XRP’s open interest, which has fallen 30% to $3.89 billion from $5.53 billion. This suggests that traders are closing positions in anticipation of a price decline.
The current trend mirrors XRP’s January price action, which saw a steep 53% fall from $3.40 to $1.61. Unless new demand enters the market, similar pressure could emerge.
XRP Technical Resistance Weighs Heavily
Technically, XRP is trapped below key resistance levels between $2.22 and $2.40, where major simple moving averages (SMAs) have formed a ceiling. Every time XRP has failed to reclaim this zone in the past, it’s followed by weeks of consolidation and eventual downward sweeps.
Analysts warn that if support at $2.00 breaks, XRP could fall to $1.90, $1.55, or even $1.20—supported by a descending triangle chart pattern and declining RSI, which currently sits at 51, down from an overbought 81.
A Silver Lining?
While the short-term outlook appears bearish, some analysts point to XRP’s historical behavior—extended consolidations before explosive breakouts. If history repeats itself, XRP’s long pause below $3 might pave the way for a rally to $10 in the long run.
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