XRP has continued to face increasing selling pressure, as both small and large holders have continued to dump their holdings over the past weeks. Hence, the asset is increasingly facing downside risk as momentum fades.
On Monday, December 29, popular crypto analyst Ali Martinez shared data revealing that XRP is currently at risk of losing its $1.77 support level, as its price continues to see failed attempts to recover.
According to the analyst, XRP stands a chance of losing its $1 level in the near term if it fails to build momentum and record positive growth in its network activity.
XRP price outlook
Although XRP has continued to fail in its recent attempt to reclaim the crucial $2 level, the asset’s price is still holding above key levels for now, currently hovering around $1.88.
However, the on-chain data showcased by the analyst provides a bearish outlook for XRP, suggesting that the asset might be at risk of adding a zero in the near future.
Despite trading near the $2 zone currently, the analyst has pointed to key indicators positioning XRP on the verge of losing its short-term $1.77 support.
While investor confidence appears to be weakening, the asset has continued to face growing selling pressure, weakening network activity, and heavy whale sell-offs, all contributing to the possibility of a sharp downside move in XRP price.
When these factors become increasingly overwhelming, they could trigger a breakdown at $1.77, which could eventually cause a sharp drop toward the next major demand zone between $0.79 and $0.80, effectively placing the crucial $1 level at risk.
XRP on-chain activity drops
Amid the fading momentum, XRP’s on-chain activity continues to flash signs of a negative trajectory. The data provided further shows that daily active addresses have dropped from about 46,000 to just 38,500 over the past week.
Apparently, this signals a sharp decline in user engagement, suggesting fading interest, lower transaction demand, and declining speculative activity. All of these stand a strong chance of weakening the asset’s price performance.
In addition to this, large XRP holders have been spotted moving over 40 million XRP to crypto exchanges, including Coinbase, in major sell-off attempts over the past week.
With whales increasingly selling off their holdings during periods of declining network activity, XRP stands a lesser chance of recovery.
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