$XRP 's market performance has taken an intriguing turn, showcasing a sharp contrast between price action and on-chain data. While the token has surged impressively, climbing to approximately $2.63 with a daily gain of 5.62%, the on-chain metrics tell a different story, raising concerns about the sustainability of this rally. Technically, XRP has broken through a descending triangle resistance zone, signaling strong momentum and the possibility of a bullish breakout. However, fundamental indicators highlight underlying weaknesses that could hinder this upward trend.
One major red flag is the sharp decline in network activity since December 2, when payments peaked at nearly two million daily transactions. This figure has now plummeted to one million, signaling a significant reduction in transaction volume and utility. Likewise, XRP’s payment volume has experienced a similar downturn, dropping from an impressive three billion to less than one billion over a short period. Active accounts, which soared to over 100,000 during the late-November rally, have now fallen below 50,000, reflecting a steep drop in user engagement. This diminishing on-chain activity raises questions about whether the price surge is backed by genuine adoption or is merely a speculative move.
From a technical standpoint, XRP finds itself at a crossroads. The immediate support level at $2.10, which coincides with the 50-day EMA, provides a critical cushion against selling pressure. On the upside, breaking through the $2.85 resistance will be crucial to confirming the bullish momentum. However, without a recovery in on-chain fundamentals—such as transaction volume and active user participation—the price rally may lose steam, leading to a retracement toward lower support zones.
For investors, the current scenario underscores the importance of closely monitoring both technical levels and network activity. While the recent price movements are promising, the lack of strong on-chain support suggests that XRP’s recovery could face significant challenges. Sustainable growth will depend on a resurgence in utility and network engagement, making these metrics key indicators for the token's long-term prospect's
