Key Takeaways:
- XRP’s symmetrical triangle suggests an imminent breakout, with price compressing near the apex.
- Taker buy volume is rising, but network usage and adoption are declining.
- Without improving fundamentals, any breakout may be short-lived and vulnerable to correction.
XRP is currently trading within a narrowing symmetrical triangle, a structure that has been forming since its late-2024 rally. With the price at $2.19, hovering just above the $2.08 support level, market watchers are closely monitoring the $2.35–$2.61 resistance zone for signs of a breakout. Despite strong bullish sentiment, troubling on-chain signals hint at potential risks ahead.
Bullish Taker Buy Volume Suggests Accumulation Phase
While XRP’s price action has stagnated, taker buy volume remains dominant over the past 90 days, according to CryptoQuant. This indicates that aggressive market participants may be accumulating XRP in anticipation of a breakout from the triangle pattern.
Such accumulation during a phase of price compression often precedes explosive moves. If bulls successfully flip the $2.35–$2.61 resistance, XRP could confirm the bullish breakout and target new yearly highs.
Weak On-Chain Activity Contradicts Market Optimism
Despite increased speculative interest, XRP’s blockchain activity is collapsing. Daily transaction counts recently dropped to 383K—one of the lowest figures since March. Network growth has also dwindled to just 892 new addresses, suggesting reduced adoption.
This divergence between rising price expectations and falling user activity creates a risky environment. A sustainable rally typically requires both investor confidence and underlying blockchain usage, which XRP currently lacks.
NVT Ratio Spikes, Highlighting Overvaluation Risks
Santiment data shows XRP’s NVT (Network Value to Transactions) ratio spiked to 4510—an extremely high level that often signals overvaluation. This means XRP’s market cap far exceeds its daily transaction volume, suggesting that investor speculation is propping up prices more than actual utility.
Without a corresponding increase in real-world use, XRP may be vulnerable to a correction as the disconnect between valuation and utility widens.
The Stock-to-Flow ratio has surged, reflecting slowing supply growth—a typically bullish signal. However, in XRP’s case, this scarcity hasn’t been matched by growing demand or on-chain engagement. Until institutional interest or user activity returns, scarcity alone may not sustain higher prices.
XRP is at a critical juncture. A confirmed breakout above the $2.61 resistance could trigger a bullish surge, supported by taker buy volume. However, weak network metrics and rising overvaluation raise red flags.
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: XRP Soars on Ripple News, Bullish Pattern Signals 75% Upside
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