Key Points:
XRP failed to hold above $3, indicating that the price still faces the risk of dropping to the $2.40-$2.00 range.
Whales continue to sell off XRP.
The number of daily active addresses has decreased, showing a decline in trading activity and liquidity.
XRP price has shown warning signals below $3. The daily chart displays a bearish technical pattern, with ongoing sell-offs by whales and reduced network activity.
After XRP's price rose to a multi-year high of $3.66, the daily chart formed a descending triangle pattern, characterized by a horizontal support line and a downward resistance line.
Recently, although the price broke through the upper edge of the triangle, it failed to stabilize, resulting in a false breakout. Bulls could not hold the $3 level, indicating insufficient market momentum.
Therefore, if XRP does not quickly return to $3 (the 50-day moving average), XRP/USDT may drop to the next support level of $2.70.
If it continues to decline, attention should be paid to the 200-day moving average at $2.50, followed by the triangle's downward target of $2.06, which represents a 31% drop from the current price.
Additionally, the descending triangle pattern of XRP is accompanied by a bearish flag during the same period. If the $3 support is lost, this flag warns that the price may drop to $2.40.
Cointelegraph reports that if the price returns to $3, bulls will attempt to push XRP above the flag's upper edge at $3.20. If successful, XRP's price is expected to rise to $3.40, and then further challenge $3.66.
On-chain data shows that whales chose to take profits when the price rose to $3.10 in this round.
Supply distribution data indicates that addresses holding between 1 million and 10 million XRP have significantly reduced their holdings to 6.79 billion, marking a six-week low.
The chart below shows that these whales have sold over 160 million XRP in the past two weeks, valued at over $476 million at current prices.
This indicates that despite the nearing approval of spot ETFs and rising expectations for Federal Reserve interest rate cuts, large investors may still be bearish on short-term price trends.
Meanwhile, Glassnode data shows a significant increase in XRP reserves on exchanges.
Data indicates that from August 27 to this Monday, the balance of XRP on exchanges increased by 665 million, reaching 3.94 billion, further enhancing the market's available supply.
In the past two months, XRP's network activity has noticeably declined. On-chain data from CryptoQuant shows that the number of daily active addresses has fallen far below the peak of 50,482 on July 18.
As of the time of writing, the number of daily active addresses is only about 21,000, with user trading volume significantly decreasing, possibly reflecting weakened market interest or insufficient confidence in XRP's short-term prospects.
During the same period, the number of new addresses has also dropped from a daily high of 11,000 to the current 4,300, indicating a decline in network adoption and user activity.
Historical data shows that a decline in network activity typically signals that prices will stagnate or fall, as reduced trading volume leads to decreased liquidity and buying momentum.
Related: Tom Lee: Bitcoin (BTC) and Ethereum (ETH) may see "huge surges" in the next three months.
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