XRP Network Engagement Plummets Amid Price Stagnation and Technical Consolidation

Summary

• Sharp Decline in XRP Network Activity: The creation of new daily XRP accounts has plummeted by over 94% in under six months, from a high of over 30,000 to just over 1,800, signaling a significant slowdown in network engagement despite XRP struggling to maintain its price above $2.

• Subdued Reaction to Positive News: Despite positive developments like progress in the SEC vs. Ripple lawsuit and anticipation of a spot XRP ETF, new account creation on the XRP network remains low, and the price has failed to reclaim the $3 mark.

• Current Price Stagnation and Technical Picture: XRP is trading around 2.28, showing recent declines. While its 200-day SMA(1.91) suggests a longer-term bullish trend might be intact, the price hovering near the 50-day SMA ($2.24) indicates consolidation.

• Mixed Analyst Outlook with Key Levels: Some analysts see potential for a breakout above $3, citing stabilization above weak support at $2.24 and stronger support below $2.01. A break below the critical historical support at $1.91 could invalidate the bullish structure.

Dramatic Decline in New XRP Account Creation

A significant downturn in on-chain activity for XRP is currently being observed, concurrent with the cryptocurrency’s efforts to sustain its valuation above the key $2 threshold.

Data sourced by Finbold from XRP Scans indicates a dramatic reduction in the creation of new daily XRP accounts, which has fallen from a peak of 30,641 on December 2 to a mere 1,822 by May 25.

This constitutes a substantial 94.05% decrease over less than six months.

Historical Context and Impact of Recent Developments

It is noteworthy that the previous zenith in new account activations occurred when XRP successfully broke out from an extended period of price consolidation below $1.

That surge in network engagement coincided with a market rally following an election, indicative of heightened investor interest during that time, likely driven by expectations of more favorable regulatory conditions for the cryptocurrency sector.

Despite recent ostensibly positive developments, the rate of new account creation on the XRP network has remained notably low.

For instance, ongoing progress is being made in the legal dispute between Ripple and the Securities and Exchange Commission (SEC), with both parties reportedly moving towards a settlement, subject to judicial approval.

Furthermore, there is increasing speculation regarding the potential approval of a spot XRP Exchange Traded Fund (ETF) by the SEC in 2025.

Implications of Reduced Activity and Stagnant Price

Nevertheless, despite these factors, XRP has largely been unable to recapture the $3 price level.

Consequently, the combination of diminishing network activity and a stagnant price could suggest either an ongoing phase of market consolidation or potentially a precursor to a further price decline.

XRP Price Analysis and Technical Indicators

At the time of reporting, XRP was trading at $2.28, reflecting a 2.87% decrease over the preceding 24 hours and a decline of over 6% on its weekly chart.

From a technical analysis perspective, XRP’s 50-day simple moving average (SMA) is situated at $2.24, while its 200-day SMA is considerably lower at $1.91.

The disparity between these moving averages suggests that a longer-term bullish trend may still be in place, although recent price movements hovering near the short-term average could indicate a period of consolidation.

Analyst Perspectives on Potential Breakout and Key Support Levels

Conversely, pseudonymous analyst RishHad has observed renewed strength in the token, suggesting a potential breakout above the $3 mark. According to this analysis from May 25, XRP is currently stabilizing just above a relatively weak support zone at $2.24. This price area is attracting short-term buyers, while a more robust support level is identified below $2.01—a point that has historically elicited significant buying interest and could serve as a launchpad for a price recovery if retested.

The prevailing consolidation pattern is viewed as constructive, with a bullish technical setup implying a possible upward movement towards the $3.20 to $3.60 price range.

A crucial level to watch is $1.91, a horizontal support that has consistently held in the past. 

Also Read: SEC Extends Deliberation Period for Spot Dogecoin and XRP ETF Proposals

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