XRP price is currently showing weakness close to the $1.37 mark because of reduced network activity and weaker technical momentum, which have raised questions about its future performance.
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At the time of writing, XRP is trading at $1.36, with a 24-hour trading volume of $3.62 billion and a market capitalization of $86.33 billion. The XRP price has gained 0.39% over the last 24 hours, but the modest recovery comes as several technical indicators continue to point to pressure below the current level.
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XRP Price Faces Key Support and Resistance
On September 12, crypto analyst Dark Defender noted that XRP is currently trading at a level located between a significant yellow support zone and an orange resistance zone.
It was stated that the following price movement will be crucial for forming XRP’s further structure. It was mentioned that Wave 3 might start a powerful rising stage if XRP succeeds in breaking out of the corresponding resistance zone.
The Dark Defender sees a possibility of a longer-term trend that would take prices to the $10.1101-$18.2275 price zone. However, there is an important task ahead for the cryptocurrency, as it needs to hold support near $1.33 and $1.29.
This is necessary because any break below this price zone would be harmful to the present bearish bias. Meanwhile, holding support and breaking above resistance would help to boost expectations of further bullish trends.
The large differential between the present rate and those set for the future by Dark Defender also proves the extent to which the forecast is contingent upon XRP being able to break above these resistance areas.
XRP Network Activity Drops Sharply
Apart from technical price action, XRP has been affected by network activity, which has declined significantly during the recent pullback.
Ali Martinez, crypto analyst, observed a significant decrease in daily active addresses. His findings indicate that the number of daily active addresses declined from 388,492 to 38,163, which is roughly a 90.18% drop.
Such a fall indicates that there are a smaller number of addresses engaging with the blockchain than before. Although daily transactions can shift rapidly and do not necessarily indicate a sustained decline in usage, the steep drop is a key statistic to monitor along with price action.
Less involvement of networks can make it difficult for a cryptocurrency to sustain its momentum, especially where the decline is sustained despite the coin being below the significant technical levels.
The implication of this development for XRP holders is that they have to contend with two different issues within the market.
XRP Technical Indicators Show Weakening Momentum
XRP is trading at $1.36130, below the Bollinger Bands middle line, which is trading at $1.39834. The upper Bollinger Bands have reached $1.47460, while the lower Bollinger Bands are trading at $1.32208. These readings indicate that the XRP price is getting closer to the lower Bollinger Bands.
Meanwhile, the MACD Line has reached 0.03993, while the Signal Line is trading at 0.05714. The value of the histogram has become negative, trading at -0.01721. It indicates that bullish sentiment has become weaker for XRP, and it can go further.
Why XRP Network Activity Matters
The dramatic fall in daily active addresses is significant since network activity is one of the other means of evaluating the condition of the blockchain aside from its price movement.
An upward movement in price along with an increase in network involvement can be a better validation of growing demand throughout the blockchain ecosystem. However, a recovering price with declining activity can pose certain doubts about its sustainability.
But one phase of decreased activity cannot be seen as evidence that XRP’s popularity is falling on an ongoing basis. Network activity may vary depending on many factors such as market situation, trading activity, applications’ activity, and cryptocurrency sentiment in general.
What matters is what happens after XRP touches its important support level.
What XRP Holders Should Watch Next
The zone $1.33-$1.29 has become one of the key zones for price action in XRP.
XRP should hold this zone and move higher back to $1.39834 to recover some short-term strength. Further upside towards $1.47460 will put the next key resistance zone on the radar.
Such a break will add strength to the technical setup and to the bullish case described by Dark Defender.
On the other hand, a break below $1.29 would make the current bull case less favorable and could result in further losses as investors seek support at lower levels.
Network behavior will play a vital role too, with a pickup in daily active addresses together with price movement creating a more positive outlook.
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This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
