XRP News Today: XRP Price Consolidates Below $3 Amid Declining Network Activity and Bearish Indicators

XRP’s price has been consolidating within a tight $2.05-$2.33 range over the last 30 days, with the $3.00 mark remaining elusive. This consolidation can be attributed to several key factors, including declining network activity on the XRP Ledger, decreasing open interest, and weak technical indicators.

The XRP Ledger has experienced a significant drop in network activity over the last six months. Onchain data from Glassnode shows that the number of new daily addresses on the network has fallen far below the peak of 15,823 reached on January 16. On a recent Thursday, only 3,500 new addresses were created. Similarly, the network’s number of daily active addresses (DAAs) sharply dropped to 34,360 from a 3-month high of 577,000, signaling reduced interest or a lack of confidence in XRP’s near-term outlook. Historically, declines in network activity typically signal upcoming price stagnation or drops, as lower transaction volume reduces liquidity and buying momentum.

XRP’s inability to reach $3 is further reinforced by decreasing open interest (OI), as per data from CoinGlass. The open interest has dropped by 30% to $3.89 billion from $5.53 billion, suggesting that investors are closing positions with the expectation of XRP price moving lower. Historically, significant drops in OI have preceded declines in XRP price. For example, the current scenario mirrors the XRP price decline in January, leading to a 53% drop to a multimonth low of $1.61 on April 7 from a multi-year high of $3.40 in January.

Technical indicators also suggest that XRP’s price is suppressed by moving averages. Data from Cointelegraph Markets Pro and TradingView shows that the XRP price is stuck below a key resistance zone between $2.22 and $2.40, where all the major simple moving averages (SMAs) currently sit. If XRP bulls do not push the price above the SMAs, the altcoin may consolidate below these trendlines for a few more weeks. The last two times XRP price broke below these trendlines, it traded sideways for 30 and 65 days and then swept lower levels before breaking upward. This aligns with a descending triangle analysis, which indicates a potential 45% drop toward $1.20 if the support at $2.00 is lost. The RSI has dropped to 51 from overbought conditions at 81 on January 20, indicating increasing bearish momentum.

Alternatively, XRP’s 200-day consolidation below $3 could be a precursor for a massive upward move to $10, similar to the one that preceded a strong breakout in 2017. However, given the current onchain data and technical indicators, it is more likely that XRP will continue to consolidate or even drop further before any significant upward movement.