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XRP Ledger is displaying a divergence worth watching: network activity is declining, while the price is attempting to stabilize. That gap is starting to serve as a crucial indicator of what will happen next.
XRP Ledger recovers
Over the past few weeks, on-chain data has declined significantly. XRP Ledger's payment volume has decreased drastically by about 70%-77% in short periods of time, and activity has reached some of its lowest points in recent memory. This decrease, which is typically a bearish leading indicator, is a result of fewer transfers, decreased participation and waning actual network usage.
If the current trajectory continues, the 500 million threshold could be jeopardized, as the number of payments is continuously declining. This is more than just noise; it indicates a slowdown in demand, particularly from speculative and retail flows that used to boost activity during rallies.
Although XRP is not collapsing from a market standpoint, it is obviously having difficulties. The asset has been trading in a narrow range between $1.30 and $1.40, holding important support while repeatedly failing to break higher resistance levels. As can be seen on the chart, the structure is technically still bearish, with lower highs, decreasing volume and moving averages serving as resistance.
Will network affect price?
The lack of network fundamentals supporting attempts at price recovery makes the situation even more precarious. XRP recently tried to push higher but quickly lost momentum, flipping into flat or slightly negative territory. This type of behavior typically indicates a lack of conviction from buyers.
What can investors expect then? Short-term consolidation or a gradual decline are the most likely outcomes. The market will probably adjust to match the price to actual usage if network activity continues to decline and does not stabilize.
Resistance is located near $1.40 and then $1.55, while the main downside levels are still around $1.25-$1.30. Two things are necessary for XRP to undergo a bullish reversal: a rebound in transaction activity (actual usage, not merely speculation about prices) and a breakout above resistance supported by volume.
Dan Burgin
U.Today Editorial Team
