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Key Takeaways:
- Ripple’s massive escrow and inflow transactions raise questions about its strategic intent amid weak user engagement.
- XRP’s transaction count and network growth are falling, signaling reduced retail interest and adoption.
- Derivative volumes and open interest have dropped, highlighting fading trader enthusiasm and market uncertainty.
Ripple Labs recently locked 400 million XRP (worth over $869 million) into escrow while receiving 500 million XRP from unidentified wallets, sparking renewed market speculation. While escrow allocations typically reinforce supply control, the unexplained inflow has led to questions about Ripple’s long-term intentions—whether it signals preparation for redistribution, strategic accumulation, or quiet liquidation.
XRP On-Chain Activity Hits Multi-Month Lows
Despite Ripple’s high-volume token movements, XRP’s on-chain activity paints a bleak picture. According to Santiment data, daily transaction count fell to just 249,000, marking a steep decline from previous levels. Network Growth also shrank significantly, with only 1,022 new addresses created recently. This slowdown in both metrics points to waning interest from retail users, potentially signaling long-term demand weakness.
NVT Ratio Drop Raises False Bullish Hopes
At first glance, XRP’s Network Value to Transactions (NVT) ratio tumbling to 136 might seem bullish. However, Santiment data reveals that this decline is a byproduct of market cap contraction—not an increase in utility. With both transaction count and address growth sliding simultaneously, the NVT dip fails to reflect genuine on-chain strength, underscoring deeper concerns in Ripple’s user base.
Derivatives Market Shows Traders Are Pulling Back
The derivatives market offers further signs of retreat. XRP’s derivatives volume dropped nearly 30%, with Open Interest falling by 3.65%, and options volume plunging 45.55%, according to CoinGlass. While short-term trading did show a minor uptick via Realized Cap HODL Waves in the 1-day to 7-day band, there’s no meaningful long-term accumulation. This pattern reveals that while speculators may be circling, serious investors are holding back.
CryptoQuant data indicates a 1.71% decline in XRP exchange reserves, suggesting tokens are moving off centralized platforms. However, the simultaneous 500 million XRP inflow to Ripple from undisclosed wallets complicates this narrative. This move raises fresh questions—could Ripple be reallocating tokens for internal purposes, or is an off-exchange distribution on the horizon?
Ripple’s token maneuvers may appear calculated, but they’ve failed to re-ignite broader market participation. With user engagement falling, derivatives traders pulling back, and on-chain metrics weakening, XRP’s fundamental outlook remains under pressure. While short-term trading may provide brief volatility, long-term conviction appears to be in decline.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
Also Read: Ripple Escrow Activity Shifts as 400M XRP Locked and EVM Sidechain Goes Live
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
