XRP has hit a rough patch over the past month, slipping nearly 17% as network activity cools and investors start pulling back. While the token is still up significantly this year, the latest signals suggest it could face more downside in the near term.
A Strong Year, but Momentum Fading
At the time of writing, XRP is trading around $2.93 still 19% higher over the past three months and up 63% from its yearly low. With a market cap of $173.8 billion and daily volumes topping $6.4 billion, it remains the third-largest cryptocurrency.
Much of this strength came after Ripple’s legal victory against the SEC, which fueled renewed confidence in XRP. Hopes of a potential spot XRP ETF have also kept institutional interest alive.
But despite those tailwinds, the token has dropped 16.8% in the past 30 days, showing that enthusiasm may be cooling.
Smart Money and Traders Turning Cautious
Fresh data points to shifting sentiment among major investors. According to Nansen, balances of XRP held in “smart money” wallets typically funds and professional traders have fallen nearly 80% over the last month. When these players scale back, retail traders often follow, leading to sharper price moves.
Derivatives data backs this up. CoinGlass reports that XRP’s open interest in futures has plunged from $10.9B in July to $7.5B. The long/short ratio is now below 1, suggesting more traders are betting on the downside than the upside.
Network Activity Also Slipping
On-chain signals aren’t helping the case. Dune Analytics shows that weekly transactions on the XRP Ledger dropped nearly 15% to 12.4 million, while active wallet addresses fell 2.1% to just over 107,000. Lower usage often signals declining real-world demand, adding fuel to bearish sentiment.
Technical Picture: Bears in Control
The charts echo this weakness. On the daily timeframe:
- Price has slipped under the 20-day and 50-day moving averages, a bearish sign.
- The RSI shows a bearish divergence, indicating that momentum is fading even as prices tried to climb.
- The Aroon Down indicator sits at 92.86%, while the Aroon Up is just 7.14% a clear sign that sellers have the upper hand.
Key Levels to Watch
If selling pressure continues, XRP could retest support at $2.70, which cushioned its decline earlier this month. A decisive break below that zone might send it further down to $2.30, aligning with the 23.6% Fibonacci retracement level.
Bottom Line
XRP has had an impressive run this year, thanks to Ripple’s legal win and ETF speculation. But with smart money pulling out, futures traders turning bearish, and network activity slowing, the token looks vulnerable to more corrections in the short term.
For now, traders should keep an eye on the $2.70 level lose that, and a deeper slide could be on the cards.
