XRP Transaction Fees Plunge 89%: Is the Price Heading Below $1.75?

As XRP moves closer to the $2 mark, a notable reduction in transaction fees has been observed. Analysts suggest this decrease could trigger a more significant price correction.

Key Takeaways

XRP transaction fees have dropped to 650 XRP per day, the lowest level since December 2020.
The descending triangle pattern indicates a potential price target of $1.73.

XRP transaction fees drop 89%: Is price headed below $1.75?

Significant Decrease in XRP Transaction Fees

Recent data from on-chain analytics provider Glassnode highlights a sharp decline in daily transaction fees on the XRP Ledger (XRPL).

Related: XRP Needs a Solana-Style Strategy to Compete, Says Ripple Executive

Currently, the total transaction fees for XRP are approximately 650 XRP per day, a stark drop from 5,900 XRP per day recorded on February 9. This drastic change underscores mounting pressure on the XRP network.

XRP transaction fees. Source: Glassnode

The decline in transaction fees parallels a significant drop in XRP's futures open interest (OI), which has plummeted from 1.75 billion XRP in early October to 0.74 billion XRP, reflecting a 59% decline. Combined with funding rates falling from 0.01% to 0.001% (7D-SMA), this trend suggests a decrease in confidence among derivatives traders regarding XRP's recovery potential.

XRP: Futures open interest. Source: Glassnode

As reported by Cointelegraph, social sentiment around XRP has taken a nosedive, entering the "fear zone," which has seen the highest levels of fear, uncertainty, and doubt (FUD) since early October. However, some analysts believe that this drop might be a precursor to a significant price rebound for XRP, similar to patterns seen in the past.

XRP’s Descending Triangle Points to Price Target of $1.73

Technical analysis of the XRP/USD pair reveals a possible risk of a further price decline if a descending triangle pattern completes.

The accompanying chart illustrates a potential downside if the price breaks below the triangle's support line at $2. The calculated target for this formation, derived by measuring the height of the triangle and adding it to the breakout point, stands at $2.20, which signifies a potential 15% decrease from the current price level.

XRP/USD daily chart. Source: Cointelegraph/TradingView

Additionally, Cointelegraph has noted that the range between $2 and $1.98 is a crucial support zone for XRP, and maintaining this level is vital to prevent further declines that could reach as low as $1.61.

As the market evolves, observing these indicators will be essential for investors and traders monitoring XRP's performance.