TLDR
- XRP faces critical support at $3.10 after dropping 10.3% in 24 hours following rejection at $3.65 resistance
- Whales accumulated over 280 million tokens in ten days, but 16.8 million XRP moved to Coinbase raises sell-off concerns
- Network activity collapsed sharply on July 24th with new users dropping to 1,899 and transactions falling to 286K
- Cup and Saucer pattern formation suggests potential continuation of rally despite current consolidation
- NVT ratio remains elevated at 699, indicating possible overvaluation relative to network utility
XRP currently trades at $3.11 after experiencing a sharp 10.3% decline in the past 24 hours. The digital asset now sits precariously above a crucial support level that could determine its near-term direction.
The cryptocurrency has shown mixed signals from both technical and fundamental perspectives. Whale activity indicates strong institutional interest, with over 280 million XRP tokens accumulated within just ten days. This accumulation pattern typically reflects long-term confidence in the asset’s prospects.
However, recent exchange flows present a different picture. An unknown wallet transferred 16.8 million XRP tokens worth over $54 million to Coinbase. This substantial exchange inflow has raised concerns about potential selling pressure that could weigh on the price.
Technical Analysis Shows Cup and Saucer Formation
Chart analysis reveals the formation of a Cup and Saucer pattern, which crypto analyst Cryptinsightuk highlighted on social media. This technical formation emerged after XRP faced double rejection at the $3.65 resistance level. Despite these rejections, the price has maintained higher lows throughout the pattern.
The Cup and Saucer pattern typically signals continuation rather than reversal when formed above previous range highs. This positioning suggests the current consolidation may be temporary before another upward move. The pattern remains incomplete, indicating potential for further price appreciation.
XRP previously rallied to $3.66 before retracing to current levels. The $3.10 support zone, which previously acted as resistance, now serves as a critical floor. Technical indicators show bearish momentum building, with MACD lines crossing bearishly at press time.
Network Activity Raises Concerns
On-chain metrics present a more concerning picture for XRP’s short-term outlook. Network growth and transaction counts surged throughout mid-July, reaching peaks between July 18th and 22nd. These metrics reflected growing user adoption and network utilization during the rally.
The situation changed dramatically on July 24th when both indicators collapsed. Network growth plummeted to 1,899 new users while transaction count dropped to just 286,000. This steep decline represents a sudden drop in new user acquisition and on-chain activity.
The timing of this network activity collapse coincides with XRP’s price weakness. Lower network engagement often correlates with reduced buying interest and can undermine price stability. The disconnect between price levels and network utility creates uncertainty about sustainable valuation.
Valuation metrics also show mixed signals. The MVRV Z-score cooled to 3.49, reducing immediate profit-taking pressure after reaching overheated levels earlier in the month. However, the Network Value to Transactions ratio remains elevated at 699, suggesting potential overvaluation relative to actual network usage.
Recent regulatory developments provide some positive backdrop for XRP. The SEC approved the Bitwise 10 Crypto Index Fund earlier this week, which includes XRP among its holdings, though this decision is currently under review. Last week saw the first XRP ETF receive approval for trading, opening institutional access pathways.
Grayscale has also applied to convert its Digital Large Cap Fund, which includes XRP, into an ETF format. These institutional products could provide new demand sources if approved and launched successfully.
The immediate focus remains on the $3.10 support level. Bulls must defend this area to maintain the overall upward trend structure. Failure to hold could trigger a move toward the next support near $2.63. Conversely, reclaiming $3.65 resistance would signal renewed strength and potential continuation toward new highs above $3.80.
Network activity metrics require close monitoring in coming sessions. A rebound in user growth and transaction volumes would strengthen the fundamental case for higher prices. Without this recovery, XRP may struggle to justify current valuation levels despite whale accumulation and technical pattern formation.
