by Vincent Muthee
The price of Ripple-backed XRP has continued to face bearish pressure as it continues to trade below $2. While it had expressed signs of recovery earlier, the coin slipped further as Bitcoin performed a dead-cat-bounce.
The decline has dampened short-term momentum and wiped out the gains realized earlier in the month. Selling pressure remains high with traders now keenly monitoring indications of stabilization.
Additionally, on-chain activity shows weakness in the network. Not until XRP develops strong investor interest, it lacks demand to significantly lead to a sustained rebound.
Long-Term Holders Increase Exposure
XRP’s on-chain data points to a noticeable shift among holders. HODL Waves data shows that wallets holding XRP for one to two years have expanded their share of the circulating supply by about 3% since the start of the month. This group now controls roughly 11% of all XRP in circulation.
The change highlights that short-term investors are transitioning into long-term investors. In fact, many investors have chosen to stay put rather than sell during the downturn. This behavior often appears when confidence outweighs short-term fear.
However, hodling alone does not promote price growth. It takes fresh consumers and increasing demand to turn markets around. The absence of new inflows will leave XRP stuck in the range even with increased holder belief.
Network Metrics Signal Ongoing Strain
XRP’s macro indicators are still showing structural weakness. The network value to transactions ratio is up to three-month high. This growth indicates that XRP has grown in valuation at a higher pace than the corresponding transaction.
Reduced transaction volumes is an indication of a low real usage on the network. Such imbalance is usually taken by the traders as an alarm call. A rally that is not supported by significant network activity is likely to dissipate in the near future.
The present NVT value indicates that there is a chance of overheating and not strength. Market expectations have not aligned with on-chain performance. As a result, bullish attempts lack confirmation from sustained demand.
To recover the momentum, XRP ‘s network activity needs to rise. Increased transaction count and frequent usage would enhance confidence and bolster increased prices.
Price Holds Support but Downside Risks Remain
XRP was trading $1.8378 at the time of writing having dipped by 1% over the last 24 hours. The drop followed a failed attempt to break out of a month-long downtrend earlier this month. Sellers quickly stepped in after that rejection.
The $1.80 area continues to act as near-term support. Buyers have defended this zone during recent tests, helping XRP avoid a sharper slide. If strong demand kicks in, XRP could resurge towards $2 with strong resistance around the $1.94 region.
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