The price of XRP is under growing pressure, suggests a potential move downward. Technical analysis now points to the risk of a 45% decline toward the $1.20 level, driven by a bearish chart structure and fading user engagement on the XRP Ledger.
Unless a bullish breakout occurs soon, XRP’s mid-term market structure may continue to deteriorate as liquidity and transaction metrics fall to multi-month lows.
Since peaking in late 2024, XRP has formed a descending triangle on its daily chart - typically considered a bearish reversal pattern when it appears after a strong uptrend. This technical formation, defined by a series of lower highs pressing against a flat support zone, suggests mounting selling pressure with weakening buyer demand at a specific price level.
As of early May, XRP is trading near $2.13, consolidating just above key support levels. But if the current price pattern plays out as textbook analysis suggests, a break below the horizontal support could lead to a selloff equal in size to the triangle’s maximum height. In this case, the projected downside target would be approximately $1.20, marking a 45% drawdown from current levels.
XRP is currently testing critical moving averages. It has repeatedly failed to maintain momentum above the 50-day simple moving average (SMA), which sits around $2.18. The 100-day SMA at $2.06 also looms as near-term support, and a confirmed close below both averages could reinforce the bearish bias.
The $2 Level as Psychological and Structural Support
The $2.00 threshold serves as both psychological support and a structural price floor within the descending triangle. A clean breakdown below this level would invalidate prior bullish scenarios and expose the XRP/USDT pair to further losses.
Should sellers gain control and push the price below this line, analysts expect a rapid move toward $1.61 initially - echoing earlier forecasts - and potentially all the way to $1.20 in the weeks ahead. The breakdown could accelerate if spot market liquidity thins out or large token holders initiate exits.
Still, technical setups are not guarantees. A sudden surge in buying volume or a fundamental catalyst could reverse the structure. In that event, a sustained breakout above $2.18 - the upper descending trendline - would nullify the bearish triangle. A confirmed close above that level could set the stage for a rally toward the psychological resistance near $3.00, last seen during late 2023 and early 2024 bull runs.
XRP Ledger Activity Hits New Lows
While price structures draw attention from traders, underlying network data tells an equally important story - and that story is currently bearish for XRP.
On-chain metrics from Glassnode and other blockchain analytics platforms show a pronounced drop in daily active addresses (DAAs) on the XRP Ledger. At its peak in March 2025, XRP recorded roughly 608,000 DAAs, indicating robust network usage and high levels of user interaction.
However, since April, that figure has collapsed. As of early May, DAAs on the XRP Ledger are hovering around just 30,000 per day - a more than 90% drop in active engagement. This suggests significant contraction in organic transaction volume, reducing both the perceived utility and liquidity of the network in the short term.
Such a steep decline in activity can carry broader implications. A lower number of active addresses typically correlates with decreased transaction throughput and smaller demand for XRP as a native asset for settlement. For a protocol whose primary use case is cross-border payments and asset transfers, this downturn reflects weakening fundamentals.
XRP’s Cyclical Market Behavior
Historically, XRP has been subject to highly cyclical behavior, with sharp periods of price expansion followed by prolonged contractions. Unlike many other digital assets that rely heavily on smart contract activity or developer-driven ecosystems, XRP’s price tends to be closely tied to institutional interest and network throughput.
XRP’s network is unique in that it is not fully decentralized like Ethereum or Bitcoin. The XRP Ledger uses a consensus protocol distinct from proof-of-work or proof-of-stake, relying instead on a set of trusted validators. While this allows for faster settlement and lower transaction fees, it has also led to ongoing debates around decentralization, utility, and regulatory classification.
In recent quarters, XRP’s rebound was partially driven by legal clarity following Ripple Labs’ partial victories in the long-running SEC case. But with that narrative priced in and little new momentum from institutional adoption or protocol upgrades, market attention is turning back to on-chain fundamentals - which are currently deteriorating.
The Role of Liquidity and Retail Involvement
Liquidity plays a key role in how technical patterns resolve. The current lack of depth in XRP spot markets could magnify moves in either direction, making a breakdown - or a breakout - sharper and more volatile.
Retail interest also appears to be fading. Social media mentions of XRP are down sharply from Q1 levels, and trading volume has stagnated compared to competitors like Solana, Ethereum, and newly trending meme coins. Without a resurgence in speculative or utility-driven demand, XRP may struggle to maintain its current support.
In the DeFi landscape, XRP remains underrepresented, with limited use across decentralized lending, liquidity pools, or synthetic asset issuance. Unlike Ethereum-based assets, XRP cannot be deployed in a wide variety of smart contract ecosystems, which limits its utility during periods of network-wide innovation or risk-on market activity.
What to Watch
For now, traders are closely monitoring the following key levels and potential catalysts:
Support zone at $2.00: A clean daily or weekly close below this level could trigger a broader selloff. Descending triangle resistance at $2.18: A confirmed breakout above this price would likely invalidate the bearish pattern and shift short-term sentiment. 100-day SMA at $2.06: A loss of this moving average would confirm technical weakness and reinforce downside risk. Network engagement: If DAAs begin to recover, this could signal a turnaround in user confidence or re-engagement with the XRP Ledger. Macro trends in altcoin markets: Broader shifts in liquidity, risk appetite, or regulation could also influence XRP’s trajectory.
Any unexpected regulatory news - particularly involving Ripple Labs, U.S. crypto policy, or international payment rails - could also introduce short-term volatility.
Technical Patterns Meet Fundamental Headwinds
The convergence of bearish technical formations with weakening on-chain fundamentals paints a challenging picture for XRP in the short to mid-term. While traders can’t rule out sudden reversals or external catalysts, the current data suggests caution is warranted.
Historically, descending triangle patterns are among the more reliable chart formations when confirmed with volume and broader market weakness. Combined with plummeting daily active addresses, it’s a signal that traders and analysts will be watching closely as May unfolds.
Whether XRP can hold its $2.00 support or capitulates toward the projected $1.20 target could determine how market participants reassess its position in the crypto asset hierarchy heading into summer 2025.