XRP News Today: XRP Surges 385% But Faces 25% Downside Risk

Generated by AI AgentCoin World
Tuesday, May 27, 2025 7:20 am ET1min read
XRP
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XRP (XRP-USD) has experienced a remarkable surge of over 385% since late 2024. However, recent on-chain metrics and technical patterns suggest that this rally may have reached its peak, indicating a potential 25% downside risk.

One of the key indicators pointing to a fragile market

structure
is XRP’s realized market cap. Over 70% of XRP’s realized market cap has accumulated near recent price highs, which is a concerning signal. This accumulation suggests that short-term holders are highly sensitive to market movements. Historically, similar spikes in the realized cap of young coins have preceded major crashes, wiping out over 80% of value in both late 2017 and 2021. This top-heavy structure implies that the current price is not supported by conviction but rather by crowd psychology, which can quickly reverse and lead to panic selling.

Network activity for XRP has also declined significantly. Active addresses have plummeted over 90% since March, indicating a dramatic drop in usage. This decline in activity suggests that the market is running on fumes, as less activity means less utility. In the crypto world, utility is crucial for maintaining demand, and its disappearance can cause price support to evaporate rapidly.

Technical analysis of XRP’s weekly chart reveals a falling wedge pattern, which is typically bullish. However, XRP’s failure to break above its upper trendline shifts the odds toward another leg down. This potential pullback could land near the 50-week Exponential Moving Average (EMA), currently at $1.76, representing a 25% decline from current levels. This technical confirmation aligns with the on-chain red flags, indicating a possible correction.

The rally in XRP was driven by clearer regulatory narratives, altcoin optimism, and broader risk-on flows. However, the backdrop is rapidly changing. U.S. inflation data is imminent, macro risks are increasing, and capital is beginning to shift into more defensive assets. This shift puts frothier assets like XRP under pressure, potentially leading to a significant pullback.