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XRP's on-chain metrics declined substantially in the last 48 hours, which would have raised concerns about the asset's market structure and even caused some issues with the price performance of the asset. The overall decline could be a sign of overall network activity fading.
Key on-chain metrics decline
XRP's overall number of payments on the network decreased by around 50% from its recent highs. The payment volume that spiked at the beginning of the month has also dropped back to the local bottom. The number of active addresses is also decreasing at a fast pace.
A decline of on-chain activity is quite often a part of lower investor confidence, however, it can also simply be the reflection of the overall market drop that happened throughout the month. The drop in general suggests that XRP is losing momentum, but things aren't that bad.
Price performance and key levels
XRP is currently trading around $2.46, after rebounding from $2.18, which is a critical support level. The asset remains below the 50 EMA, which is a bearish signal. The next resistance stands at $2.69, where XRP was denied entry. A successful breakthrough would be a reversal signal for XRP, but there's almost no buying support going on apart from retail buyers, which is clearly not enough.
Tomiwabold OlajideXRP's loss of $2.18 will open up the way to $1.65, the price level that coincides with 200 EMA — one of the strongest support levels for the price there is. Losing it could signal the end of a bullish trend and cause an acceleration of selling pressure.
What's next for XRP?
Of course, the lack of activity is a signal to step away from the asset for investors, and things are unlikely to get better in such conditions. Luckily, we are more inclined toward a neutral trend rather than a catastrophic outflow.
Staying above 50 EMA and reclaiming $2.7 are the keys to reversal for XRP. Later on, XRP might attempt to push above $3. The on-chain activity has to surge, though, in order to provide more ground for XRP's price reversal.
Yuri Molchan
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