Main Points:
XRP indicates a bearish descending triangle on the daily chart, posing an 18% risk of dropping to $2.40.
A decrease in daily active addresses shows lowered transaction activity and diminishing XRP demand.
Spot taker CVD is negative, indicating decreasing investor interest.
XRP (XRP) is trading 23% below its multi-year high of $3.66, with multiple indicators pointing to a potential decline toward $2.40.
According to Cointelegraph Markets Pro and TradingView, XRP is trading beneath a descending triangle pattern in the daily timeframe, as illustrated in the chart below.
A descending triangle is a bearish pattern, marked by a flat support line and a declining upper trendline.
The price fell below the support level at $2.95 on Tuesday, continuing the downward trend with a target of $2.40.
A drop to this level would signify an 18% decline from the current position.
As noted by Cointelegraph, for the altcoin to avoid a deeper correction to $2.24, it needs to regain the $3 support level. The last two recoveries at this level occurred in mid-July and early August, leading to rallies of 25% and 15%, respectively.
XRP/BTC Negative Divergence
XRP’s bearish trend is also shown by a developing negative divergence between the XRP/BTC pair and the relative strength index (RSI).
The daily chart below indicates that the XRP/BTC pair increased from July 10 to Aug. 18, forming higher lows.
However, during the same time frame, the daily RSI dropped from 75 to 43, creating lower lows, as demonstrated in the chart below.
Related: Price predictions 8/18: SPX, DXY, BTC, ETH, XRP, BNB, SOL, DOGE, ADA, LINK
When prices decrease, but the RSI increases, it often indicates that the prevailing uptrend may be weakening, leading traders to secure profits at higher levels, causing decreased interest and buyer fatigue.
The chart above also indicates that XRP/BTC is above a critical support zone between 0.0000245 BTC and 0.0000250 BTC, reinforced by the 200-day simple moving average.
A breach below this region could result in the XRP/BTC pair continuing its decline, exacerbated by further drops in XRP price.
Falling Network Activity May Intensify XRP Sell-Off
The XRP Ledger has seen a notable decline in network activity compared to Q1/2025 and June to July. On-chain data from Glassnode shows that daily active addresses (DAAs) on the network are significantly lower than those observed in March and June.
The ledger recorded 608,000 DAAs on March 19 and 577,134 on June 16, indicating substantial user activity and transactions. However, a sharp fall occurred from late June through August, as depicted in the chart below.
Currently, with about 33,000 DAAs, user transactions have diminished, possibly indicating a decline in interest or confidence in XRP’s near-term outlook.
Historically, declines in network activity often precede price stagnation, as lower transaction volumes reduce liquidity and buying momentum.
Transaction numbers have also plummeted by 51%, from 2.5 million in June to 1.25 million currently, according to CryptoQuant.
Transaction count and active addresses are crucial metrics for gauging user interactions with a network, providing insights into overall activity and user engagement, which are key indicators of blockchain adoption and token interaction.
Thus, this notable decline in on-chain indicators could drive XRP’s price lower, raising speculations about a deeper drop in the short term.
Negative 90-Day CVD Supports XRP’s Downtrend
Examining the 90-day spot taker cumulative volume delta (CVD) reveals that sell-side activity is intensifying.
CVD evaluates the disparity between buy and sell volume over a three-month span.
Since July 28, selling pressure has been prevalent in the order book, following the XRP/USD pair reaching multi-year highs above $3.66 on July 18.
The negative CVD (red bars in the chart above) suggests profit-taking actions among traders, indicating diminishing demand as sellers gain control.
If the CVD remains negative, it signifies ongoing selling pressure, which may lead to another downward leg, as observed in past corrections.
With more than 91% of XRP supply still in profit at present prices, investors may continue to lock in gains, contributing to existing obstacles.
This article does not provide investment advice or recommendations. All investments and trading moves carry risk, and readers should conduct their own research when making decisions.
