XRP Faces Uphill Battle as Key Indicators Turn Bearish

The digital asset XRP continues to struggle below the psychologically important $3 level, with recent blockchain data revealing concerning trends. Multiple technical and onchain factors now suggest this resistance may hold firm in the near term.

Network Activity Shows Significant Decline

Recent data from blockchain analytics firm Glassnode paints a worrying picture for XRP's network health. Daily new addresses have plummeted to just 3,500 - a stark contrast to January's peak of 15,823. This 78% drop in new user adoption signals weakening demand for the cryptocurrency.

Equally troubling, active addresses have collapsed from 577,000 to 34,360 within days. Such dramatic reductions in network participation historically precede price stagnation or declines, as reduced transaction volume diminishes liquidity and buying pressure.

Investors Retreat as Open Interest Drops 30%

Futures market data reveals growing bearish sentiment among traders. XRP's open interest has fallen sharply from $5.53 billion to $3.89 billion over the past month, indicating widespread position closures. This mirrors a similar pattern in January that preceded XRP's 53% price collapse to $1.61.

"The derivatives market is sending clear warning signs," noted market analyst Nancy Lubale. "When open interest declines this sharply while price consolidates, it typically foreshadows downward movement."

Technical Setup Suggests Further Downside Risk

XRP's price action currently shows multiple bearish technical formations. The cryptocurrency remains trapped below all major moving averages in the $2.22-$2.40 range, a critical resistance zone that has capped rallies for weeks.

Market technician CasiTrades warned: "The $2.25 level continues to act as strong resistance. Until this breaks, we could see tests of $2.01, $1.90, or even $1.55."

The weekly chart reveals a potentially ominous descending triangle pattern. A breakdown below the $2.00 support could trigger a 45% decline toward $1.20, according to classical technical analysis principles.

Contrarian View: Extended Consolidation May Precede Breakout

Some analysts point to historical precedent suggesting XRP's prolonged consolidation could eventually yield to significant upside. The cryptocurrency's 200-day base below $3 resembles patterns seen before major rallies, including 2017's parabolic move that propelled XRP to all-time highs.

However, most indicators currently favor caution. The Relative Strength Index (RSI) has retreated from overbought territory at 81 to a neutral 51, reflecting waning bullish momentum. With network activity declining and traders reducing exposure, XRP appears unlikely to challenge $3 without significant positive catalysts.

——Market participants should monitor the $2.00 support level closely, as a breakdown could accelerate selling pressure——