XRP, the cryptocurrency tied to the Ripple network, has recently faced a significant decline in network activity, raising concerns about its future price trajectory. Over the past three months, XRP’s active addresses have dropped sharply, signaling waning engagement from investors and traders alike. This drop in participation could lead to price stagnation or further decline if the trend continues.

Declining Active Addresses and Its Impact on XRP

A key indicator of Ripple’s potential price movement is the number of active addresses, which has been steadily falling. According to data from Glassnode, XRP’s active addresses peaked at over 203,000 in early December 2024, but have since dropped to around 82,000—representing a more than 50% decline. This sharp decrease in active wallets typically signals reduced transaction volumes and investor interest, which could weigh heavily on XRP’s price in the short term.

Historically, a sustained drop in active addresses has been linked to price stagnation or downward trends, as fewer transactions often indicate that fewer investors are willing to engage with the network. This reduction in activity is a crucial factor to monitor, as it suggests a potential lack of momentum for the asset in the near future.

Technical Indicators and Bearish Trends

The technical outlook for XRP is currently bearish, further reinforcing concerns about the asset’s price. A head and shoulders pattern has emerged on the 12-hour chart, a classic reversal signal that suggests further downside risk for XRP. This formation suggests that, unless key support levels hold, XRP could continue to trend lower.

At press time, XRP was trading at $1.9939, reflecting a 9.23% decline in the last 24 hours. The 50-day Moving Average (MA) stands at $2.5019, a level significantly above XRP’s current price. This large gap indicates that selling pressure remains strong, and XRP’s ability to regain upward momentum is questionable in the short term.

Moreover, the Accumulation/Distribution (A/D) indicator has shown a downward trend, suggesting that large holders, or whales, are exiting their positions rather than accumulating more XRP. This behavior could signal a lack of confidence among major investors, which may contribute to further price pressure.

The Crucial $2.20 Level

XRP’s price must reclaim the $2.20-$2.25 zone to avoid further declines. This level has become a key resistance point, and failure to break above it could indicate continued weakness in the market. A failure to reclaim this range could see XRP testing lower support levels, potentially around the $1.80-$1.85 area, which would signal further downside risks.

However, if XRP can rally and see an increase in active addresses—signaling renewed investor confidence—it could potentially stabilize at higher levels. A resurgence in network activity is essential for XRP to reverse its downtrend and resume a bullish trajectory. Investors will need to keep a close eye on on-chain metrics and market sentiment to determine whether such a reversal is likely.

Conclusion: Caution Ahead for XRP Investors

The current market conditions for XRP suggest a cautious outlook. The steady decline in active addresses, combined with bearish technical indicators, points to potential further declines unless there is a significant recovery in network participation. XRP’s price trajectory heavily depends on whether it can reclaim the critical $2.20 resistance level and whether investor engagement increases in the coming weeks.

For now, XRP remains in a vulnerable position, with investors awaiting signs of renewed momentum. If the decline in active addresses continues, the asset could face further downside pressure. However, a surge in network activity could provide the catalyst needed for a reversal, setting the stage for a potential recovery. Until then, XRP’s future remains uncertain, and investors should proceed with caution.