XRP Loses 65% in Transaction Volume: What Happened?

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On-chain metrics and price action both suggest a concerning short-term outlook, and XRP is displaying indications of waning market support. Recent data indicates that key on-chain values for XRP have fallen by more than 65%, indicating a sharp decline in network engagement and user activity. This is a warning sign that frequently precedes or validates more general bearish pressure.

At $2.06 on the price chart, XRP is just above a crucial support level at $1.94, which corresponds to the 200-day EMA. To date, this level has served as XRP's fundamental buffer, preventing a more significant collapse. Nevertheless, the asset continues to be stuck in a long descending channel with lower highs and lower lows.

The persistence of resistance at $2.27 and $2.37 stifles any significant bullish momentum. The Relative Strength Index (RSI), which is currently at about 39, indicates that XRP is getting close to oversold territory. Even so, it has not been sufficient to start a rally, particularly as falling trading volumes further highlight lack of investor interest. But it is the on-chain side that is the real worry. The payment volume, which monitors the flow of XRP between ledger accounts, has plummeted.

This sharp 65% drop suggests that fewer people and organizations are using the XRP Ledger for value transfers and cross-border settlements. The long-term bull case for XRP is weakened when payment activity suddenly declines, as this indicates a decline in utility demand. XRP could drop below the 200 EMA since sentiment is turning bearish and momentum indicators are not showing any significant bullish divergence.

In that case, $1.75 is the next significant support, and if the current level breaks, it may soon become a target. All things considered, XRP is in a risky position, and price action and on-chain data indicate that further declines may be in store unless strong buying pressure materializes quickly.

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