XRP rallies since September 6, approaching $0.60 resistance.
Declining network activity suggests waning demand.
Price could drop to $0.38 if bearish trend continues, or rise to $0.74 if demand returns.
XRP has experienced a notable price surge since September 6, propelling the altcoin towards a formidable resistance level at $0.60. However, as demand for the digital asset begins to wane, there are indications that XRP may struggle to breach this crucial threshold, potentially repeating historical patterns of resistance.
On-chain metrics paint a concerning picture for XRP’s short-term prospects. Data from Santiment reveals a decline in both daily active addresses and new address creation since September 13.
Over the past three days, the number of wallet addresses engaging in XRP transactions has dropped by 18%, while new addresses created for trading purposes have decreased by 8%.
This reduction in network activity often signals diminishing interest in an asset, as fewer addresses interacting with the blockchain typically correlates with reduced market engagement. XRP’s price action has mirrored this decline in on-chain activity, with the token’s value falling 3% over the past two days to its current trading price of $0.57.
Source: Santiment XRP’s price drop pushes it below 20-day EMA
From a technical perspective, XRP’s recent price dip has pushed it below its 20-day exponential moving average (EMA), a key indicator often viewed as a short-term support level.
Breaching this threshold can signal weakening upward momentum and may prompt traders to exit long positions in anticipation of further price declines.
The Ichimoku Cloud, another prominent technical indicator, adds to the bearish narrative. XRP’s price has slipped beneath the Leading Span A (green) of the cloud, suggesting a potential shift in market sentiment. If demand fails to recover, the price could gravitate towards the Leading Span B (red), which represents a critical support level within the Ichimoku system.
Looking ahead, XRP faces two potential scenarios. In a bearish outcome, continued selling pressure could drive the price towards its August 5 low of $0.38, representing a major retracement from recent gains.
