- XRP price continued its downward spiral this month.
- It has crashed below a crucial support level, pointing to more downside.
- Activity on the XRP Ledger network has continued to dwindle this year.
XRP price has suffered a harsh reversal since July last year, as it collapsed from a high of $3.6563 to the current $1.1187. This retreat has coincided with the broader crypto market crash and its weak fundamentals. Worse, technical analysis suggests that the sell-off has more room to run.
XRP Price Technical Analysis Points to More Downside
The weekly chart shows that the Ripple price has slumped in the past 12 months, erasing all the gains made between April and July last year. It recently crashed below the 50-week and 200-week Exponential Moving Averages (EMA).
It is also attempting to drop below the key support of $1.1172, its lowest point on February 2nd this year. Such a move will be a sign that bears have prevailed.
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Ripple token is also attempting to move below the 78.2% Fibonacci Retracement level of $1.04. A move below that price will confirm the bearish outlook and will be a sign that bears have prevailed.
The Relative Strength Index (RSI) and the MACD indicators have continued moving downwards. Therefore, the most likely scenario is where the token continues falling as sellers target the key support level of $1.00. Losing this support will point to further downside and put it at risk of falling to $0.3847, its lowest point in July 2024.
Why Ripple Price Has Plunged
Broadly, there are two main reasons why the XRP token has slumped in the past few months: technical and fundamental.
Technically, the weekly chart shows that the XRP price remained inside a narrow range between $0.3025 and $0.9250 between May 2022 and November 2024. That is a sign that it remained in the accumulation phase of the Wyckoff Theory.
It then moved to the markup phase in November 2024 after President Donald Trump won the election. This surge happened as investors predicted that he would end the Ripple vs SEC case, which he did. Since then, the coin moved to the distribution and then the markdown stage, where it is today.
Fundamentally, XRP price has dived because of the ongoing sell-off in the crypto industry. Bitcoin and top altcoins have all plunged in the past few months, erasing billions of dollars in value. This retreat happened as investors shifted their focus on the artificial intelligence theme.
XRP has also slumped because of its weak fundamentals. For example, data shows that activity on the XRP Ledger has waned in the past few months. For example, the total value locked (TVL) has slumped to $38 million, its lowest level in years. It has fallen from a high of $120 million a few months ago.
XRP Ledger has made just $40k in fees this quarter after it made over $75k in the first quarter. Also, the number of active addresses on the XRP Ledger has been in a downtrend.
As a result, there is a disconnect between the happenings in the XRP Ledger and in Ripple Labs, which has grown its valuation to over $50 billion. Ripple Labs has also used the XRP tokens to execute some major buyouts, including Hidden Road and GTreasury.
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