The XRP price has dropped nearly 4% over the past 24 hours and is down 21% in the last 30 days, bringing its market capitalization to $144 billion. This decline comes amid growing concerns in the crypto market, as key on-chain and technical indicators signal weakening momentum. The Chaikin Money Flow (CMF) has dipped to its lowest level since June 2022, while active addresses have plummeted by 53% in just one month. These developments are raising red flags among traders and analysts alike.
XRP’s Chaikin Money Flow Hits Critical Low
The Chaikin Money Flow (CMF) for XRP has fallen to -0.27, down sharply from 0.30 just three days ago. This indicator combines price and volume data to assess buying and selling pressure across a given period. Values above zero typically reflect accumulation—buyers are in control—while readings below zero suggest distribution, meaning sellers are dominating the market.
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A sustained negative CMF indicates persistent capital outflows, and in XRP’s case, this downward trend highlights growing bearish sentiment. With CMF now at its weakest point since mid-2022, the risk of continued selling pressure increases. Historically, prolonged periods of negative CMF have preceded extended price corrections across major cryptocurrencies.
If the CMF remains below zero or continues to decline, XRP may face further downside pressure. However, any recovery toward the neutral 0.0 mark could signal stabilizing sentiment and offer bulls an opportunity to reclaim control. For now, the market remains cautious, with investor confidence hanging in the balance.
Active Addresses Drop by 53%: Network Engagement Falters
One of the most concerning developments is the dramatic drop in 7-day active addresses, which have fallen to 190,470—a 53% decline from the 407,000 recorded on January 20. This metric tracks unique wallet addresses involved in transactions over a seven-day window and serves as a reliable gauge of network usage and user engagement.
A steep reduction in active addresses often correlates with declining interest, reduced transaction volume, and lower market participation. In XRP’s case, this sharp correction suggests that both retail and institutional activity may be cooling off.
This current level marks the lowest 7-day active address count since November 14, 2024, reinforcing concerns about waning momentum. Reduced on-chain activity typically leads to lower liquidity, which can amplify volatility and make price recovery more difficult.
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Historically, sustained drops in user engagement have preceded periods of price stagnation or extended bearish runs. If active addresses continue to decline, it could signal deeper issues with investor confidence. Conversely, a rebound in this metric could indicate renewed interest and potentially support a bullish reversal.
Death Cross Formation: Bearish Signal on the Horizon
Technical analysis reveals another troubling development—XRP’s Exponential Moving Averages (EMAs) are forming a death cross. This occurs when the short-term EMA (typically 50-period) crosses below the long-term EMA (usually 200-period), signaling a shift from bullish to bearish momentum.
A confirmed death cross is often interpreted as a strong bearish indicator, suggesting that downward pressure may intensify in the coming weeks. Given the current market conditions—declining CMF, falling active addresses, and weakening sentiment—this pattern adds further weight to the bear case.
If selling pressure accelerates, XRP could test immediate support at $2.33**. A breakdown below this level might trigger a deeper correction of up to **29%**, potentially pushing prices down to **$1.77. Such a move would mark a significant setback and could extend bearish sentiment across the broader market.
However, not all hope is lost. A reversal in momentum could see XRP challenge resistance at $2.83**. A breakout above this zone could open the door for a rally toward **$3.15, with extended gains potentially reaching **$3.28**—marking the first time XRP surpasses $3 since February 2025.
Key Support and Resistance Levels:
- Support: $2.33 (critical floor)
- Breakdown Risk: $1.77 (-29% from current levels)
- Resistance: $2.83 (bullish reversal trigger)
- Upside Targets: $3.15 → $3.28
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Frequently Asked Questions (FAQ)
Q: What does a drop in active addresses mean for XRP?
A: A decline in active addresses suggests reduced network usage and lower investor engagement. When fewer users transact on the network, it often reflects waning interest, which can lead to weaker price performance and lower liquidity.
Q: Is a death cross always followed by a price crash?
A: Not necessarily. While a death cross is a bearish signal, it doesn’t guarantee a crash. It indicates strengthening downward momentum, but reversals can occur if buying pressure returns or macroeconomic conditions improve.
Q: What is Chaikin Money Flow (CMF), and why does it matter?
A: CMF measures the flow of money into or out of an asset by combining price and volume data. A negative CMF suggests more selling than buying, which can foreshadow further declines if sustained.
Q: Can XRP recover from this downturn?
A: Yes. Recovery depends on multiple factors: stabilization of CMF, rebound in active addresses, and technical breakout above key resistance levels like $2.83. Positive news or increased adoption could also reignite bullish momentum.
Q: What would trigger a rally above $3 for XRP?
A: A combination of strong buying volume, improved on-chain activity, and broader market optimism could push XRP past $3. Regulatory clarity or new partnership announcements could act as catalysts.
Q: How reliable are on-chain metrics like active addresses?
A: Highly reliable. On-chain data provides transparent, real-time insights into user behavior and network health, making it one of the most trusted tools for fundamental and technical analysis in crypto markets.
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Final Outlook
XRP is currently navigating a critical phase marked by declining technical indicators and weakening user engagement. With CMF at multi-year lows, active addresses down by over half, and a death cross forming on the charts, the short-term outlook remains bearish.
However, markets are dynamic. Should key metrics stabilize—such as CMF recovering toward zero or active addresses rebounding—bullish momentum could return. Traders should monitor support at $2.33 closely; a break below could accelerate losses, while a bounce may signal a potential reversal.
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Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Always conduct independent research and consult with a qualified professional before making any trading decisions.