XRP network activity crashes 44%; Is $1 drop next?

Finance

XRP network activity crashes 44%; Is $1 drop next？

The XRP network is seeing a drop in new addresses, which could pressure the asset and threaten its hold above the key $2 support.

Specifically, the number of newly created addresses has dropped by 44% over the past month, falling from a high of 5,200 on March 22 to just 2,900 by April 17, according to data from cryptocurrency analytics platform

This drop in network activity aligns with XRPs price decline, as fewer new addresses, a key sign of adoption, often signal weakening investor confidence and can precede further losses.

Notably, the declining new addresses comes at a time when XRPs technical setup is painting a bearish picture amid ongoing price consolidation.

XRP bearish technicals

To this end, in an April 17 analysis, cryptocurrency trading expert Ali Martinez observed that XRP is exhibiting a textbook bearish head-and-shoulders pattern.

The formation shows a clear left shoulder, head, and right shoulder, with the price recently breaking below the neckline around $2.05. A retest of this level has already occurred, often a precursor to continued downward movement.

This pattern, commonly seen before market reversals, suggests XRP could be headed much lower. If confirmed, the move could drag prices down to the $1.30 and $1.40 range, representing a potential drop of over 30% from current levels.

Unless XRP can reclaim the neckline as support, the risk of a deeper sell-off remains high.

Meanwhile, as reported by Finbold, pseudonymous analyst CrediBULL noted that for XRP to stage a recovery, it needs to establish a bottom in the $1.60 zone. At the same time, short positions have surged, with bears eyeing levels below the $2 mark.

In addition to the bearish technical setup, XRP has also seen a spike in whale transactions. This comes as the asset potentially approaches a major regulatory milestone, with the legal battle between Ripple and the Securities and Exchange Commission (SEC) nearing a conclusion.

XRP price analysis

XRP extended its losses at the time of writing, trading at $2.04, down nearly 2% over the past 24 hours. Over the past seven days, the asset has corrected by more than 7%.

Sentiment around XRP remains bearish, supported by a Fear & Greed Index score of 37 (Fear). Technically, the price is trading below the 50-day simple moving average (SMA), indicating short-term downward momentum, though it remains above the 200-day SMA, suggesting long-term strength.

The assets 14-day Relative Strength Index (RSI) is 49.40, indicating a neutral stance, while volatility is moderate at 7.74%, suggesting relatively stable but cautious trading conditions.