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XRP is making a clear indication that it might be preparing for a long-awaited comeback. Over 1.6 million transactions were completed on the network in the past day, which is a blatant indication of increased usage and engagement that cannot be disregarded. Increased transactions can be a sign of both speculative trading and practical adoption, which is why network activity spikes typically occur before significant price movements.
A web of moving averages is exerting pressure on XRP, which is still locked in a consolidation phase based on its price action. In the $2.22-$2.23 range, the 50 EMA and 100 EMA still serve as dynamic resistance, limiting the volatility of the price movement. It is crucial to remember that XRP is gradually being forced into a tighter wedge by the higher lows that have been forming since June.
If buying pressure keeps increasing, this could lead to a volatility breakout. The increase in the number of transactions is noteworthy for several reasons. It first shows a resurgence of interest that could be linked to the return of institutional players to the market or an increase in on-chain settlement activity, both of which are crucial for supplying confidence and liquidity.
Second, as more participants move capital in anticipation of upside potential, elevated transactions frequently serve as the catalyst for stronger price trends. Compared to XRP's significant breakouts in 2023 and early 2024, spot market volume is still quite low despite this encouraging on-chain activity. Therefore, before assuming a runaway rally is under way, traders should lower their expectations and wait for a steady increase in trading volume.
It may be possible to reach the next resistance levels at $2.40 and $2.55 in the upcoming weeks if volume starts to validate the surge in transactions; 1.6 million XRP transactions per day are a clear indication that the network is once again heating up.
It is possible that this surge will serve as the impetus for a true recovery phase if the price can break through the moving averages and the volume does the same. Until then, traders must continue to exercise caution and vigilance as XRP negotiates a convoluted and fluctuating market structure.
Vladislav Sopov
U.Today Editorial Team