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XRP has faced challenges in keeping up with the broader cryptocurrency market rally that started last week following the Federal Reserve’s interest rate cut. While other cryptocurrencies have enjoyed significant gains, XRP has only managed a modest 2% increase. Analysts and investors believe this underperformance is due to growing interest in other projects, which has diverted attention and capital away from XRP. Adding to these concerns, user participation in the XRP Ledger blockchain has declined, raising questions about the project’s long-term prospects.
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Key Data from Santiment
Insights from on-chain analytics firm Santiment reveal a significant drop in user engagement on the XRP Ledger. This has contributed to a sense of unease among investors. As they observe other altcoins posting double-digit gains, fear and uncertainty are mounting within the XRP community. Investors are now looking for signs of a turnaround. However, until the price can reignite user interest and regain momentum, XRP risks falling further behind in this bullish market cycle. With the market in a state of flux, all eyes are on XRP to see if it can overcome these challenges and join the broader crypto rally.
XRP Facing Serious Risk
XRP is currently trading below the critical $0.60 mark, a psychological level that has acted as resistance for the past few months. Despite a recent surge in the crypto market, XRP shows signs of a potential retracement. While the altcoin initially benefited from the broader bullish sentiment, weakening market signals suggest it may struggle to sustain this momentum in the near future.
One concerning indicator is the decline in user engagement on the XRP Ledger blockchain. Key metrics from Santiment indicate that XRP’s price Daily Active Addresses (DAA) divergence dropped to -74.46% yesterday. The price DAA divergence measures whether user participation is increasing alongside the price. A declining DAA, especially when the price is rising, is a bearish signal because fewer users interact with the network despite the price increase. This divergence suggests that the recent uptrend could be weak and unsustainable.
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Potential Downturn Risks
If XRP continues to struggle and fails to close above the $0.60 resistance, it may face a more significant downturn. The altcoin could experience a deep correction, potentially falling to lower demand levels around $0.55. Investors are now closely monitoring XRP’s price action to determine if it can reclaim the $0.60 level and regain momentum or if further declines are on the horizon.
Price Levels to Watch
XRP is currently trading at $0.589 after two weeks of sideways movement, fluctuating between $0.57 and $0.59. Despite several attempts, the price has failed to break above the crucial $0.60 resistance level, leaving it at risk of a downturn. XRP is now approximately 6% above its daily 200 moving average (MA), which sits at $0.548—a critical support that has provided stability in the past.
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Future Projections
For bullish momentum to build, XRP must break past the $0.60 barrier and aim for higher supply levels around $0.65. This move would signal renewed strength and potentially trigger a more substantial rally. However, the current price action appears weak, with limited upward momentum. If XRP fails to hold above the $0.60 level, a retest of lower demand zones around $0.55 is expected.
The worst-case scenario for XRP would be an extended period of this sideways range, lacking a decisive breakout in either direction. Such prolonged consolidation could increase selling pressure, driving the price lower. Investors and analysts are watching closely to see if XRP can reclaim the $0.60 level, initiate a new uptrend, or face further declines.
Featured image from Dall-E, chart from TradingView
