XRP's Daily Active Addresses Plunge 65% After 485% Surge

XRP, which had experienced one of the strongest rallies in the current bull market, is now showing signs of a slowdown. On-chain data reveals a sharp 65% drop in daily active addresses, from a peak of 63,389 on January 16, 2025, to just 22,859 as of April 3. This substantial contraction in activity follows a period of intense speculative interest between November 7, 2024, and mid-January 2025, during which XRP surged over 485%.

The bullish sentiment during this period was largely driven by investor hopes that a pro-crypto presidency could benefit Ripple and its ecosystem. During this window, daily active addresses spiked by over 432.6%. However, what followed was a classic example of short-term speculation outpacing sustainable demand. Realized capitalization jumped from $30.1 billion to $64.2 billion, with nearly $30 billion of that growth attributed to capital deployed within just six months. This rapid inflow concentrated wealth in the hands of new holders, with over 62.8% of XRP’s realized cap now belonging to investors who entered during that narrow timeframe.

When viewed together with the heavy retail participation, this sharp increase in new holders raises caution signs, as many investors are likely vulnerable to downside volatility given their now elevated cost basis. As enthusiasm cooled off in late February, signs of a retreating speculative wave became apparent. The Realized Profit/Loss ratio has been declining since January, indicating more frequent losses being realized and fewer profits taken, often a precursor to deteriorating market confidence. When combined with the steep decline in network activity, it suggests that many of these new holders are now underwater, increasing the risk of panic-driven exits.

Amid broader market jitters triggered by sweeping global tariffs, XRP briefly dipped below the key psychological $2 mark. However, it has since bounced back, gaining 5% intraday and currently trading at $2.13. The decline in XRP network activity highlights the volatility and unpredictability of the cryptocurrency market. Investors and stakeholders in the XRP ecosystem will be closely monitoring the situation to gauge the potential impact on the network's long-term prospects. The recent data serves as a reminder of the importance of diversification and risk management in the cryptocurrency space, as even assets that experience significant gains can be subject to sudden and dramatic declines in activity.