XRP Network Faces Challenges Amid Decline in New Addresses
The XRP blockchain is currently experiencing a significant decrease in the creation of new addresses, a trend that may exert downward pressure on the cryptocurrency and pose a threat to its ability to maintain the crucial $2 support level.
Decline in New XRP Addresses: A Warning Sign?
In recent weeks, there has been a notable 44% reduction in the number of newly established XRP addresses. According to data from the cryptocurrency analytics platform Glassnode, this figure dropped from a peak of 5,200 on March 22 to a mere 2,900 by April 17.
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The decline in new addresses is a critical indicator of adoption. A reduction in this metric often signifies waning investor interest and could potentially foreshadow further price depreciation. This decrease aligns with the broader downward trend in XRP’s market performance.
XRP’s Bearish Technical Indicators
Adding to the concern, XRP’s technical chart patterns are currently exhibiting bearish signals. On April 17, renowned cryptocurrency analyst Ali Martinez identified a classic bearish head-and-shoulders pattern forming on the XRP price chart.
This pattern is characterized by a left shoulder, a head, and a right shoulder, and the recent price drop below the neckline at approximately $2.05 is a critical development. A retest of this level has already occurred, often an indicator of continued downward pressure.
Such chart patterns are frequently observed prior to market reversals, suggesting that XRP could experience a further decline. Should this pattern play out, XRP’s price may descend to the $1.30 to $1.40 range, representing a potential decrease exceeding 30% from current prices.
For XRP to avert a deeper sell-off, it must reclaim the neckline as a support level. Nonetheless, the risk of a further price drop remains substantial.
Analyst Insights and Market Sentiment
In parallel, the analyst known as CrediBULL has highlighted that for XRP to initiate a recovery, it must find support in the $1.60 zone. Meanwhile, short positions have surged, with bearish traders targeting prices below the $2 threshold.
In addition to the bearish technical outlook, an increase in large-scale whale transactions has been observed. This activity coincides with Ripple’s ongoing legal battle with the U.S. Securities and Exchange Commission (SEC), which is approaching a crucial juncture.
XRP Price Analysis: Current Market Trends
At the time of writing, XRP has extended its losses, trading at $2.04, marking a nearly 2% decline over the past 24 hours. Over the preceding week, the cryptocurrency has corrected by over 7%.
Market sentiment remains bearish, as reflected in a Fear & Greed Index score of 37, indicating fear. Technically, XRP’s price is positioned below the 50-day simple moving average (SMA), suggesting short-term downward momentum. However, it remains above the 200-day SMA, hinting at long-term market resilience.
The 14-day Relative Strength Index (RSI) stands at 49.40, signifying a neutral stance, while volatility is moderate at 7.74%, pointing to relatively stable yet cautious trading conditions.
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