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Despite a sharp decline in on-chain payment activity throughout the XRP Ledger, XRP has experienced an unexpected short-term recovery, reporting a price increase of about 19%. It is difficult for traders to tell whether this move is the start of a long-term recovery or just a technical bounce inside a larger downtrend, because of the divergence between price action and network usage.
XRP bounces
After testing the lower limit of its multi-month descending channel, XRP has recently seen a sharp increase in price. Near local lows around $1.40, buyers intervened forcefully, resulting in a quick recovery toward the $1.60-$1.70 range. Growing volumes of spot and derivatives trading supported the move, suggesting that speculative interest swiftly returned after the selling pressure subsided.
In contrast, on-chain data presents a completely different picture. As a result of a slowdown in transactional usage throughout the network, payment counts on the XRP Ledger have decreased by almost 70% from recent highs. Decreased payments usually indicate decreased cross-border payment flows, decreased utility demand, or decreased settlement activity, factors that typically impact price rather than encourage a rally.
Better market positioning
This discrepancy shows that market positioning rather than fundamental growth may be the primary driver of the current recovery. Especially after prolonged declines, where markets become technically oversold, opportunistic dip-buying, short covering, and liquidation cascades frequently drive such rebounds.
The most important question for investors right now is sustainability. The move may develop into a more robust reversal if the price keeps rising while the volume of payments stabilizes or starts to recover. However, XRP might go back to consolidation, or even retest recent lows if on-chain activity is still weak and the price stalls below significant resistance zones.
As traders evaluate whether momentum buyers can sustain control, volatility is probably going to stay high in the near future. While sustained divergence might suggest that the current bounce is still brittle rather than a verified trend shift, a recovery bolstered by increased ledger activity would indicate better conditions.
Vladislav Sopov
Dan Burgin