XRP price lost a crucial support on Thursday as a sea of red engulfed the crypto market.
The XRP token dropped to $0.4400, its lowest level since April and 41% below its highest level this month.
Ripple, one of the biggest cryptocurrencies in the industry is facing substantial challenges, which partly explains why its token has dropped recently.
On-chain data paints a picture of a network that is no longer growing. According to XRP Scan, the number of unique addresses that were active as senders have dropped from 50,000 in January to 5,850 today.
Additional data reveals that the number of transactions dropped from a high of 6.8 million in January to just over 1 million.
XRP Transaction count
Also, the number of payments from one account to another have fallen from almost 6 million in December to 1.1 million.
The weakness comes at a time when investors are concerned with the market positioning of Ripple’s network in the financial services industry. Ripple Labs’ original idea was to help companies like banks do cross-border transactions faster.
Today, these institutions have better alternatives, such as stablecoins. For example, ANZ Bank, a leading Australian company, demonstrated how customers could use Chainlink’s CCIP to transfer its issued stablecoins to move money.
Meanwhile, XRP whales are dumping the token. Data by Whale Alert showed that a whale moved tokens worth $15 million to Bitso on Wednesday. On the sane day, another whale moved tokens worth $14.8 million to Bitstap. Altogether, whales have sold XRP tokens worth $60 million this week.
🚨 32,010,000 #XRP (14,823,091 USD) transferred from unknown wallet to #Bitstamphttps://t.co/FUtVx1eZdO
— Whale Alert (@whale_alert) July 3, 2024
XRP price crosses key support
Ripple is also at risk technically. It formed a double-top pattern at $0.7485, its highest point in November last year and March 2024. In technical analysis, a double-top pattern is a good signal of more downside.
XRP has now moved below this pattern’s neckline at $0.4872. It also formed a death cross on April 20th as the 200-day and 50-day moving averages crossed each other.
On Thursday, it then lost its final support when it dropped below $0.4557, where it struggle to move below since May. That could be a signal that bears have prevailed, which could push the XRP price much lower.