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Key takeaways:

• XRP’s inability to sustain above $3 raises concerns of further declines toward $2.40–$2.00.

• Whale activity indicates ongoing selling pressure on XRP.

• Decreasing daily active addresses point to diminished transaction activity and lower liquidity in the network.

XRP faces technical headwinds as its price struggles below $3 amid signs of weakening momentum, compounded by whale liquidation and declining blockchain activity.

XRP technicals suggest further downside risk

Since reaching multi-year highs around $3.66, XRP has been consolidating within a descending triangle—a pattern marked by a persistent support level and a descending resistance line on its daily chart. An attempted breakout above the triangle’s upper boundary was short-lived, failing to establish strength above $3, indicating that bulls lack conviction.

Failure to reclaim $3, which coincides with the 50-day simple moving average (SMA), could see XRP sliding toward $2.70, a key support area. If downside momentum persists, key levels to monitor include the 200-day SMA at $2.50 and the triangle’s eventual target around $2.06—representing a 31% decline from current levels.

Additional bearish signals come from a descending bear flag visible on the same timeframe, suggesting that if support at $3 falls, XRP could decline further to around $2.40.

On the trader front, if XRP manages to defend $3, buyers might attempt to push the price above $3.20, aiming for a rally toward $3.40 and potentially up to $3.66, especially amid positive sentiment surrounding potential ETF approvals and macroeconomic factors shaping the crypto markets.

Whales offload XRP ahead of further declines

Onchain metrics reveal that large investors have started taking profits during the recent rally to $3.10, with significant XRP sales occurring over the past two weeks. The supply held by addresses with holdings between 1 and 10 million XRP has fallen sharply, hitting a six-week low of 6.79 billion tokens.

Data indicates that whales have offloaded over 160 million XRP, worth more than $476 million at current prices, reflecting a cautious outlook despite upcoming crypto regulation developments and broader market optimism.

Meanwhile, an increase in XRP reserves on exchanges further underscores potential selling pressure, with the balance rising by 665 million tokens to nearly 3.94 billion, according to Glassnode data. This uptick in availability of XRP for sale could weigh on price in the near term.

Network activity slowing on the XRP Ledger

The XRP Ledger has seen a significant decline in network activity over recent months. Onchain data from CryptoQuant shows daily active addresses have fallen from over 50,000 in July to approximately 21,000 today, indicating waning user engagement and transaction volume.

Additionally, new addresses participating in the network have decreased from a peak of 11,000 daily to roughly 4,300—signaling reduced adoption and interest among users. Historically, such declines often lead to sideways movement or price dips, as lower transaction activity diminishes liquidity and buying interest.

This analysis does not constitute investment advice. Cryptocurrency trading involves risks; due diligence is advised before making any financial decisions.