Is XRP on the Brink of a Major Price Drop?

Is XRP Heading for a Price Decline? Analyzing Recent Market Trends

XRP has made headlines in the cryptocurrency world by rallying over 385% since late 2024. However, recent data brings some caution to this surge, suggesting it may signal a precarious market top for the digital asset. As of May 2025, analysis reveals alarming trends in XRP’s network activity and market structure that could indicate an impending price decline.

Understanding XRP’s Market Dynamics

According to data from Glassnode, more than 70% of XRP’s realized market capitalization, which reflects the value based on the price at which each token last moved, has been accumulated during a specific period between late 2024 and early 2025. This accumulation phase mirrors past market peaks, where new investors are often more reactive to price changes, potentially leading to sharper sell-offs during corrections.

The realized cap of short-term holders has surged notably since November 2024, peaking in January 2025 when XRP’s price hit around $3.40. Historically, these patterns of a top-heavy market structure have led to significant downturns, as seen in late 2017 and 2021. During both of these periods, XRP experienced a massive influx of investment from newer capital before peaking—only to face severe corrections thereafter.

XRP’s Declining Network Activity

Adding to the concern, XRP’s active address count witnessed a dramatic drop of over 90% since March 2025. This decline in network activity aligns with a broader trend of decreased transactional demand. The spike in active addresses in March was promising but has now reverted to levels observed before the noteworthy breakout. Historically, similar divergences between rising prices and declining on-chain activity have emerged at local market tops, particularly in late 2017 and early 2021.

This significant downturn in active addresses suggests that fewer users are utilizing XRP for transactions, as they may be holding their tokens in anticipation of price increases. This behavior often precedes market corrections, raising questions about the sustainability of XRP’s recent rally.

Technical Indicators Point to a Potential Downturn

Examining XRP’s technical indicators provides further caution. The cryptocurrency is currently in a falling wedge pattern, which typically signals a potential price decline. As of May 26, XRP shows signs of entering a short-term correction cycle after failing to break above the upper trendline of the wedge.

This broader pullback could potentially drive XRP’s price down to around $1.76, approximately 25% lower from its current standing. This target aligns with the lower trendline of the wedge and the 50-week exponential moving average (EMA), indicating a crucial support level that traders should watch closely.

Conclusion: What Lies Ahead for XRP?

As we approach mid-2025, the data points to a critical juncture for XRP. The combination of a top-heavy market structure, declining network activity, and technical formations suggest that a price correction could be imminent. While the cryptocurrency market is notoriously volatile, these indicators may serve as early warnings for investors who should proceed with caution.

Investors are encouraged to conduct their own research and remain informed, paying close attention to market developments related to XRP. For those interested in exploring further insights, check out our articles on cryptocurrency market trends, XRP price movement, and trading strategies.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making decisions.

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