XRP Price May Be Weak Below $2, But On-Chain Data Tells a Different Story

XRP has seen recent price struggles, failing to surpass the significant $2 mark, leading to a bearish sentiment in the market. However, the on-chain activity on the XRP Ledger tells a contrasting story of increased network engagement, high transaction volumes, and growing institutional interest.

Key Takeaways

XRP’s price has been under pressure, hovering below $2.
Despite bearish market signals, on-chain metrics indicate robust activity, with high transaction volumes.
Daily transactions on the XRP Ledger have recently reached up to 900,000, with occasional spikes above 1 million.
The discrepancy between low prices and high network activity raises questions about future market dynamics and investor sentiment.
This situation could suggest either bullish momentum building from increased use or a disconnect from immediate market demand.

XRP Outlook

Current Price Trends and Network Dynamics

In recent weeks, XRP's price has felt the weight of selling pressure, struggling to reclaim the critical $2 threshold. From a technical perspective, the market sentiment appears bearish, lacking significant upward momentum.

Despite this, on-chain data reveals an interesting contrast. The XRP Ledger is witnessing notable activity, highlighting a more complex picture beyond just price fluctuations.

On-Chain Metrics Show Increased Activity

XRP’s trading price has remained beneath $2, a level that has served as a persistent barrier during attempts to recover. Indicators like the 50-, 100-, and 200-day simple moving averages show hesitation, lacking consistent buying pressure, despite the consistent influx of Spot XRP ETFs. As a result, XRP's price may be poised for extended consolidation or potential declines unless buyers can assert control and push prices higher.

Market conditions, particularly those concerning Bitcoin and other cryptocurrencies, have not been favorable, with capital moving out of altcoins limiting rebounds. This leaves XRP and many other major cryptocurrencies vulnerable to further downtrends.

However, the XRP Ledger's on-chain data reveals a contrasting situation. Recent metrics indicate a continually active network, with daily transaction counts nearing 900,000, marking one of the busiest periods in several months. Notably, the data from XRPL tracker, XRPScan, shows average daily transactions above 900,000 throughout December, with spikes exceeding 1 million on some days. This level of activity suggests a level of engagement that contradicts the prevailing bearish outlook, indicating that significant retail activity could pave the way for future growth.

XRP Transaction Stats

Diverging Trends: Price vs. On-Chain Activity

The widening gap between XRP's bearish price movement and robust on-chain activity brings to light how the market currently values network usage. Analysis of payment flows indicates that substantial amounts of XRP, often exceeding a billion coins on certain days, are being transferred daily. This daily movement represents billions of dollars in value transacted on the ledger, despite prices stagnating.

Moreover, the number of active users involved in trading has been in the hundreds of thousands, which is unexpectedly high for a cryptocurrency experiencing price struggles. This dynamic suggests that traders may primarily be engaging in short-term trading rather than long-term investment.

XRP Price Movement

This divergence points to a critical question: Does the current strength in on-chain activity signal an early investment as Ripple seeks deeper adoption, or is it simply detached from immediate market demand?

XRP chart analysis Price drop below $2 | Source: XRPUSDT on Tradingview.com