XRP Faces Critical Test as Active Addresses Drop 53%

Over the past week, XRP has seen a marginal 2% change in its price, struggling to maintain levels above $2.50. The cryptocurrency's market capitalization has decreased to $140 billion, though trading volume has surged by 47% within the last 24 hours, reaching $5.6 billion.

XRP is experiencing increased buying pressure as indicated by the positive Chaikin Money Flow (CMF), although its network activity is on the decline. The Exponential Moving Averages (EMA) suggest a bearish outlook, with the price hovering in a crucial range that could either trigger a rebound towards $3 or initiate a 26% correction.

The CMF for XRP has risen sharply to 0.13 from -0.06 in just one day, marking a return to positive territory after three days of negative readings, indicating heightened buying pressure. This shift from negative to positive values implies an influx of capital into XRP, hinting at renewed buyer interest.

The CMF indicator ranges from -1 to 1, with positive values suggesting accumulation and negative values indicating distribution. With a CMF of 0.13, XRP is currently experiencing a revival in buying pressure, which may lead to price stability or increase, provided it sustains this level. A drop back below zero could reignite selling pressure and weaken any bullish momentum.

XRP's 7-day active addresses peaked at 495,000 on December 5, 2024, but have seen a steady decline, reaching a current low of 231,000. This decline in active addresses points to reduced network engagement, which could influence future price movements.

Monitoring active addresses provides insights into user participation and asset demand. A decreasing trend often signals reduced transactional activity, potentially leading to lower liquidity and diminished buying pressure. The current monthly low in active addresses suggests waning interest, which might hinder price growth unless the trend reverses.

The EMA lines for XRP continue to present a bearish picture, with short-term averages below long-term ones. The current trading range lies between a support level at $2.26 and resistance at $2.54. An increase in downward momentum could cause XRP to break below $2.26, potentially falling to $1.77, marking a 26% correction.

Should buying pressure intensify and lead to an upward trend, XRP may challenge the $2.54 resistance, with a possible surge to $2.65. Sustained momentum could even see XRP testing $2.96. Enhanced network activity and the potential approval of an XRP ETF could further bolster bullish momentum, enabling a breakthrough above $3 and a test of the next major resistance at $3.15.

Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.