XRP extended losses for a third straight session as broader crypto sentiment weakened and key activity metrics tied to Ripple USD deteriorated. While short-term pressure remains, a mix of on-chain data, ETF flows, and chart patterns suggests the outlook is more nuanced than the headline drop implies.
XRP Slides With the Broader Market
XRP fell to around $1.88, its lowest level since December 19 and roughly 50% below this year’s peak. The move mirrored weakness across the market, with Bitcoin and major altcoins also trading lower as risk appetite faded.
The pullback extends a multi-month decline that has weighed on XRP despite intermittent rallies.
RLUSD Network Activity Deteriorates
Pressure on XRP has been compounded by weakening metrics on the Ripple USD network. Data compiled by Artemis shows RLUSD’s circulating supply increased by about 16.5% over the past 30 days to roughly $1.4 billion.
However, usage tells a different story. Adjusted transaction volume plunged by approximately 85% to $3.4 billion, while total transactions fell around 30% to about 375,000. The number of active RLUSD addresses also declined sharply, dropping roughly 27% to around 5,000.
The divergence between supply growth and falling activity has raised concerns about near-term demand dynamics across the Ripple ecosystem.
Layer-2 Expansion Could Support a Recovery
Despite the current slowdown, analysts expect RLUSD activity to improve in the coming year as the stablecoin expands to multiple layer-2 networks, including Optimism, Base, and Unichain. The rollout is planned in collaboration with Wormhole, which could broaden distribution and improve transaction throughput.
Such developments may help stabilize usage metrics over time, easing one source of pressure on XRP.
ETF Inflows Offer a Bullish Counterweight
Another supportive factor for XRP is continued accumulation by US investors through spot ETFs. On Monday alone, XRP ETFs recorded more than $43 million in inflows, lifting cumulative inflows to about $1.12 billion.
These funds now hold roughly $1.25 billion in assets, with Canary, 21Shares, and Bitwise among the largest issuers. Notably, the ETFs have not recorded a single day of outflows since receiving approval in November.
Technical Setup Hints at a Potential Reversal
From a technical perspective, XRP’s longer-term chart is beginning to show early signs of exhaustion in the sell-off. The token has fallen from a year-to-date high near $3.65 to around $1.87, but several bullish patterns are taking shape.
XRP has formed a falling wedge, a structure often associated with bullish reversals as descending trendlines converge. Momentum indicators also point to a bullish divergence, with the Percentage Price Oscillator rising even as price drifted lower.
In addition, an inverse head-and-shoulders pattern has emerged, reinforcing the case for a potential rebound. If confirmed, bulls may target resistance near $2 initially, followed by the $2.50 area.
XRP faces near-term risk as weakening RLUSD network activity weighs on sentiment and price. However, strong ETF inflows, upcoming layer-2 integrations, and multiple bullish technical patterns suggest downside momentum may be nearing exhaustion. The balance between deteriorating on-chain metrics and improving structural signals will likely determine XRP’s next major move.
