Key Takeaways:
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XRP has formed a bearish descending triangle pattern, indicating a potential 45% price drop to $1.20.
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A decline in daily active addresses suggests a decrease in transaction activity and liquidity.
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A breakthrough price above $2.18 could invalidate the current bearish forecast.
Recent trends suggest a cautious outlook for XRP (XRP), as emerging technical patterns coinciding with diminishing network activity raise concerns among investors.
The Formation of a Descending Triangle
Examining the XRP daily chart reveals the development of a bearish descending triangle pattern following its late 2024 price rally. This configuration, characterized by a consistent support level and a downward-sloping resistance line, typically signifies a reversal from previous upward momentum.
Historically, such formations often result in a downward breakout when the price breaches below the established support level, potentially leading to a decline reflective of the triangle’s maximum height.
Currently, bulls find it increasingly challenging to maintain XRP’s value above the 50-day simple moving average (SMA), now resting at the $2.18 mark. If this pattern persists, a close below both the 50-day SMA and the 100-day SMA at $2.06 may propel XRP/USDT toward the psychological support level of $2.00.
If this crucial support fails, further declines could see XRP pricing descend to around $1.20 by the end of May, translating to a significant 45% drop from its existing levels. This prediction aligns with previous analyses suggesting a potential dip as low as $1.61 if key support holds are compromised.
Declining Network Activity Raises Concerns
Recent data from Glassnode indicates that XRP’s network activity has sharply decreased since Q1 2025. On March 19, the ledger recorded upwards of 608,000 daily active addresses (DAAs), which demonstrated strong user engagement and transaction volumes. In stark contrast, recent figures show only approximately 30,000 daily active addresses, indicating a significant reduction in user transactions and possibly reflecting diminishing confidence in XRP’s short-term prospects.
Typically, a drop in network activity signals impending stagnation or price declines, as reduced transaction volume leads to diminished liquidity and buying pressure. Despite a 1.17% dip in XRP’s price over the past 24 hours, daily trading volumes have surged by 30% to $2 billion. This rise can be interpreted as traders either securing profits or repositioning while awaiting XRP’s next directional move.
Market analyst Dom noted the increase in selling volume, attributing it to substantial market selling within the past week, which contributed to XRP’s inability to sustain upward momentum.
This article does not provide investment advice or recommendations. All investments and trading decisions carry risks, and it is essential for readers to perform their due diligence prior to making any financial commitments.
