XRP Faces Resistance Amid Weak Market Signals
Key Takeaways
XRP, the cryptocurrency of the Ripple network, is currently showing weakness at a critical resistance level of USD 2.04. Despite a short-term price increase, a sustained breakout appears unlikely. Technical indicators, on-chain data, and the activity of large investors (so-called “whales”) point to increased risk and a lack of market support.
Technical Analysis: Resistance at USD 2.04 Remains Intact
XRP has been trading for months within a so-called “falling wedge” — a chart pattern that often signals an upcoming trend reversal. While the price managed to recover to USD 1.99 in the short term, it was once again rejected at the USD 2.04 resistance level. This level forms the upper boundary of the wedge and is proving to be a strong barrier.
Notably, the long upper wicks in the daily candles near this level indicate selling pressure — buyers were unable to sustainably push the price above the resistance. As long as XRP does not achieve a clear daily close above USD 2.04, the downward structure remains intact.
On-Chain Data Shows Lack of User Activity
A look at blockchain data provides additional insight into a weak market structure. The so-called “Daily Active Addresses” divergence stands at -273%. This means that although the price has risen, the number of active users has remained nearly unchanged. This discrepancy argues against organic demand and suggests that the increase is driven by speculation.
Such divergences between price movement and user activity have often led to price corrections in the past. Without an increase in real usage, the current price level remains fragile.
Network Value to Transactions Ratio Suggests Overvaluation
Another critical indicator is the NVT ratio (Network Value to Transactions), which currently stands at 474.93 — an unusually high value. This ratio measures market capitalization in relation to the transaction volume on the network.
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A high NVT value means that XRP’s market value is significantly higher than its actual utility. Historically, such phases have often been precursors to price declines. Without a significant increase in transaction activity, the current price is unlikely to be sustainable.
Whale Activity and Leveraged Positions Increase Risk
On April 9, a large transaction of 230,770,000 XRP (approximately USD 414 million) was registered between unknown wallets. Such movements may indicate internal reallocations or institutional activity, but they do not provide a clear signal of buying or selling intentions.
At the same time, data on leveraged positions shows that long positions worth USD 2.1 million were liquidated — significantly more than the USD 705,000 in short positions. This indicates excessive optimism among buyers. If the price continues to fail at the USD 2.04 mark, further long liquidations are likely, potentially increasing selling pressure.
Outlook: When Is a Breakout Realistic?
A short-term breakout above USD 2.04 is currently unlikely. The combination of technical resistance, weak on-chain usage, an inflated NVT ratio, and uncertain whale activity argues against a sustainable upward movement. Only once both user activity and transaction volume increase significantly could XRP overcome the resistance level.
Our Assessment
XRP currently faces a critical hurdle. Despite short-term price gains, it lacks fundamental support. Technical resistance, weak blockchain data, and risky market positioning all suggest caution. Anyone looking to invest in XRP should closely monitor further developments and not rely solely on short-term price movements.
Sources
- TradingView
- Santiment
- Coinglass
- Whale Alert
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