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In contrast to the high activity levels observed earlier in the year, XRP Ledger is currently displaying a significant slowdown in network usage. Even though XRP's price action is still struggling on the charts, on-chain data now shows that transactional demand has drastically decreased throughout the network, which raises additional questions regarding institutional participation.
Major activity drop
The network activity has decreased by about 80% from recent peaks, according to recent metrics that track the amount of XRP payments between accounts. Strong utilization was indicated by previous transfer spikes, which may have been related to institutional settlement flows and speculative positioning. The most recent data, however, shows that transaction volume has sharply decreased, with activity reverting to baseline levels following the earlier spike.
At the same time as this slowdown, XRP's price structure is showing fresh signs of weakness. Recently, the asset's price moved toward the $1.35-$1.40 region after breaking below a descending support channel. Moving averages are still pointing lower, indicating that the market is still bearish and that strong selling pressure is still being applied to rebounds.
Caution advised
Transaction demand across networks usually decreases when institutional capital retreats, particularly in ecosystems where liquidity provisioning and cross-border settlement are essential functions. This makes the atmosphere more hostile for investors.
Declining network activity frequently indicates a decline in demand for usage, which, if the trend continues, may negatively impact sentiment over the long run. Normalization following periods of high activity is common, but it is also critical to understand that transaction volume spikes are not always sustainable.
XRP might have trouble regaining network momentum in the near future if ETF withdrawals persist. On the other hand, ledger activity could be swiftly restored if institutional flows stabilize.
As of right now, the main indicator is still the same: institutional participation has cooled and XRP's network activity is reflecting this slowdown. As a result, price and sentiment are looking for new support before a possible recovery can start.
Dan Burgin
U.Today Editorial Team