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XRP has struggled to keep up with the broader crypto market rally that began last week following the Federal Reserve’s interest rate cut.
While other cryptocurrencies have seen impressive gains, XRP managed a modest 2% increase. Analysts and investors suggest that this underperformance is due to the growing interest in other projects, diverting attention and money from the token. Adding to these concerns, user participation in the XRP Ledger blockchain has declined, raising questions about the project’s long-term prospects.
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Important data from on-chain analytics company Santiment reveals a significant decline in user engagement with Ledger, contributing to a sense of unease among investors. As they watch other altcoins post double-digit gains, fear and uncertainty are mounting within the XRP community.
Investors are now looking for signs of change, but until the price can renew the user’s interest and regain momentum, it risks falling behind further in this bullish market cycle. As the market fluctuates, all eyes are on XRP to see if it can overcome these challenges and join the broader crypto rally.
XRP Faces Big Risk
XRP is trading below the key $0.60 mark, a psychological level that has served as resistance for the past few months. Despite the recent surge in the crypto market, XRP is showing signs of a potential reversal. Although the altcoin initially benefited from the broad bullish sentiment, its weak market signals suggest that it may be difficult to sustain this momentum in the near future.
One of the indicators related to the decline of user engagement in the XRP Ledger blockchain. Key metrics from Sentiment show that the XRP Daily Active Addresses (DAA) price differential dropped to 74.46% yesterday.
DAA price variation measures whether user participation increases in proportion to price. A declining DAA, especially when the price is rising, is a bearish signal because fewer users are interacting with the network despite the rising price. These differences suggest that the recent upswing may be weak and not last.
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If XRP continues to struggle and fails to close above the $0.60 resistance, it could face significant downside. The altcoin could see a deep correction, possibly falling to demand lows around $0.55. Investors are now closely monitoring XRP’s price action to see if it can regain the $0.60 level and regain momentum or if further declines are imminent.
View Price Levels
XRP is trading at $0.589 after two weeks of sideways movement, fluctuating between $0.57 and $0.59. Despite several attempts, the price failed to break above the key resistance level of $0.60, leaving it vulnerable to the downside. XRP is now about 6% above its 200 daily moving average (MA), which sits at $0.548—a key support that has provided stability in the past.
To build bullish momentum, XRP should break the $0.60 barrier and aim to bring higher levels around $0.65. This movement will show renewed energy and may result in a very large rally. However, the current price action appears to be weak, with limited upward momentum. If XRP fails to hold above the $0.60 level, it is expected to retest the much sought-after areas around $0.55.
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The worst case scenario for XRP would be an extended period of this sideways range, lacking a decisive edge in either direction. Such long-term consolidation can increase selling pressure, lowering the price.
Investors and analysts are watching closely to see if XRP can regain the $0.60 level, initiate a new rally, or face further declines.
Featured image from Dall-E, chart from TradingView