Is XRP’s Rally Over? On-Chain Data Suggests a Potential Correction

Key Insights:

• Over 70% of XRP’s realized cap accumulated near recent highs, mirroring past market tops.
• XRP’s active addresses have plummeted over 90% since March 2025, indicating waning transactional activity.
• A falling wedge pattern suggests a potential 25% price drop towards key support at $1.76.

XRP’s remarkable 385% surge since late 2024 is raising concerns among analysts. Recent on-chain analysis points to potential vulnerabilities.

Warning Signs in XRP’s Market Structure

Data from Glassnode reveals that over 70% of XRP’s realized market cap—the value based on each token’s last transaction price—was accumulated between late 2024 and early 2025. Glassnode data highlights this concentration.

The increase in the realized cap of 3-to-6-month-old coins—a younger cohort—since November 2024, especially after January 2025’s peak near $3.40, is particularly noteworthy. This concentration among newer investors, historically susceptible to price fluctuations, increases the risk of a sharp correction.

This pattern echoes past market peaks. In late 2017, a surge in young XRP coins preceded a 95% decline from the ~$3.55 peak. A similar pattern emerged in 2021, with a sharp rise in short-term holder realized cap preceding an 80% drop.

This history raises concerns that XRP may have formed a local top in January 2025, potentially leading to further price declines.

Cooling Network Activity

XRP’s active addresses, a key indicator of network usage, experienced a sharp spike in March 2025, followed by a dramatic over 90% drop back to pre-breakout levels.

Historically, this divergence between price increases and declining on-chain activity, observed in late 2017 and early 2021, has signaled local market tops. This suggests reduced user engagement and a potential shift towards holding rather than active trading.

Related: XRP Price Stagnation Despite Bullish News

Technical Analysis Hints at Correction

XRP’s weekly chart displays a falling wedge pattern, indicating potential price consolidation. As of May 26, the cryptocurrency shows signs of entering a short-term correction after failing to break above the wedge’s upper trendline.

A pullback towards the wedge’s lower trendline, aligning with the 50-week EMA near $1.76 (approximately a 25% drop), is possible.

Disclaimer: This article does not provide financial advice. Conduct thorough research before investing.