Bearish chart patterns, weak investor demand, and falling on-chain activity suggest XRP’s downtrend could extend further in the short term.
1. Descending Triangle Breakdown Signals $2.40 Target
XRP recently confirmed a bearish descending triangle pattern on its daily chart, breaking below key support at $2.95.
- The breakdown carries a measured target of $2.40, signaling a potential 18% downside from current levels.
- Descending triangles are typically continuation patterns, meaning this move could mark a prolonged trend rather than a short-term dip.
The only way to invalidate the bearish setup would be for XRP to reclaim and hold $3, a level that previously triggered strong 15–25% rallies in July and August.
2. XRP/BTC Divergence Reveals Weakening Momentum
Another warning sign comes from the XRP/BTC pair, which is showing a bearish divergence against the Relative Strength Index (RSI).
- Between July 10 and August 18, XRP/BTC formed higher lows, suggesting upward momentum.
- But RSI moved downward from 75 to 43, showing fading strength in the uptrend.
This divergence hints that buyers are losing steam, prompting profit-taking as confidence erodes.
The XRP/BTC pair is also testing crucial support between 0.0000245 and 0.0000250 BTC, held up by the 200-day simple moving average. A breakdown below this range could accelerate XRP’s fall relative to Bitcoin.
3. Network Activity Plunges, Reflecting Waning Interest
On-chain data from Glassnode and CryptoQuant shows a dramatic decline in daily active addresses (DAAs) and transactions on the XRP Ledger.
- DAAs fell from over 600,000 in March to just ~33,000 in August, a drop of over 90%.
- Transaction volume also halved, falling from 2.5 million in June to 1.25 million currently.
These metrics reflect reduced network usage, likely due to:
- Weakened user engagement
- Lower liquidity and demand
- Growing uncertainty around XRP’s near-term value
Historically, a sharp decline in on-chain activity precedes price stagnation or correction, as fewer users interact with the blockchain.
4. Negative CVD Shows Stronger Sell-Side Pressure
The 90-day spot taker cumulative volume delta (CVD) continues to flash red, revealing a seller-dominated market.
- Since XRP peaked at $3.66 on July 18, selling pressure has steadily increased.
- Negative CVD indicates that market orders to sell are outweighing buys — a key sign of profit-taking and demand weakness.
More than 91% of XRP supply is still in profit, suggesting that holders may continue selling to secure gains — adding to downward pressure.
Unless the CVD flips positive and signals a rebound in buy-side demand, XRP could struggle to regain momentum in the short term.
Conclusion: Caution Ahead for XRP Bulls
XRP’s technical setup, on-chain weakness, and cooling investor interest all point to continued downside risk. Without a strong recovery above $3 and a rebound in whale activity or user engagement, $2.40 remains a realistic target.
While long-term fundamentals may remain intact, short-term sentiment is clearly bearish. Traders and investors should watch for:
- A retest of the $2.40–$2.24 support zone
- Shifts in whale flows and network activity
- Any signs of CVD reversal or RSI recovery
