XRP Network Faces Decline Amid Decreasing Activity
The XRP network is experiencing a significant downturn in activity, as evidenced by a notable drop in active addresses. This decline coincides with XRP’s struggle to approach the $4 threshold, raising concerns about the asset’s future trajectory.
XRP Active Addresses Experience Significant Decline
On July 21, XRP’s active addresses peaked at 44,143 within a weekly timeframe. However, by July 27, this figure had plummeted to 24,644, representing a sharp 44.2% decrease. This drop followed a brief surge from 30,190 on July 20, indicating a fleeting increase in user engagement, based on the latest on-chain data sourced from CryptoQuant via Finbold.
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Price Movement Reflects Reduced Network Demand
Simultaneously, XRP’s price declined from $3.55 to $3.16, marking an approximate 10.99% decrease. The sharp reduction in active addresses signals a waning demand and diminishing network utilization, which in turn weakens the price support for XRP.
Investor Sentiment and Capital Shifts
The asset’s dip below $3.50 has cooled investor sentiment, prompting a shift in capital back to Bitcoin, thereby stalling the broader altcoin market rally. This shift underscores the challenges faced by XRP in maintaining positive momentum.
XRP Whale Activity Raises Investor Concerns
The recent dip in XRP’s momentum is also attributed to increased whale activity. Investors were alarmed when Ripple co-founder Chris Larsen transferred approximately $140 million worth of XRP to exchange-linked wallets starting July 17.
In total, 50 million XRP, valued at around $161 million, was moved, with a significant portion directed towards centralized exchanges. An additional 10 million XRP was distributed across two newly inactive wallets, sparking speculation about potential strategic profit-taking.
Market Impact and Speculation
While some perceive these movements as routine, others caution about the potential market impact. CryptoQuant contributor J.A. Maartunn emphasized that Larsen still holds over 2.5 billion XRP, worth nearly $9 billion, suggesting that future sales could exert further downward pressure on the token.
Future Prospects for XRP
Currently, XRP may require broader market support to sustain its price above the $3 mark, especially as it continues to follow Bitcoin’s trend. However, opportunities for upward momentum could arise if the U.S. Securities and Exchange Commission (SEC) decides to approve a spot XRP ETF, potentially bringing the protracted legal case against Ripple to a conclusion.
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