Key takeaways:
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XRP forms a bearish descending triangle on the daily chart, risking a 45% drop to $1.20.
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Declining daily active addresses signal reduced transaction activity and liquidity.
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A breakout above $2.18 could invalidate the bearish pattern.
The XRP (XRP) price flashes warning signs as a bearish technical pattern emerges on its daily chart, coinciding with declining network activity.
XRP descending triangle hints at 45% price drop
The XRP price chart has been forming a descending triangle pattern on its daily chart since its late 2024 rally, characterized by a flat support level and a downward-sloping resistance line.
A descending triangle chart pattern that forms after a strong uptrend is seen as a bearish reversal indicator. As a rule, the setup resolves when the price breaks below the flat support level and falls by as much as the triangle’s maximum height.
The bulls are struggling to keep XRP above the 50-day simple moving average (SMA), currently at $2.18, signaling a lack of strength.
If this trend continues, a close below the moving averages, namely the 50-day SMA and the 100-day SMA at $2.06, could sink the XRP/USDT pair to the psychological support level at $2.00.
Related: Is XRP price going to crash again?
If this support fails, XRP price could tumble toward the downside target at around $1.20 by the end of May, down 45% from current price levels.
XRP’s descending triangle target echoes an earlier analysis that warned of a possible decline to as low as $1.61 if key support levels don’t hold.
Conversely, a clear breakout above the triangle’s resistance line at $2.18 will invalidate the bearish structure, putting XRP in a good position to rally toward the $3.00 psychological level.
Declining XRP network activity
The XRP Ledger has experienced a significant drop in network activity compared to Q1 2025. Onchain data from Glassnode shows that the network’s daily active addresses (DAAs) are now far below March’s peak.
On March 19, the ledger recorded a robust 608,000 DAAs, reflecting high user engagement and transaction activity. However, this metric crashed in April and early May, as shown in the chart below.
With only around 30,000 daily active addresses, user transactions have decreased, possibly signaling reduced interest or a lack of confidence in XRP’s near-term outlook.
Historically, declines in network activity typically signal upcoming price stagnation or drops, as lower transaction volume reduces liquidity and buying pressure.
Meanwhile, XRP’s 1.17% drop over the last 24 hours is accompanied by a 30% increase in daily trading volume to $2 billion. Trading volume increases amid a price decline can be interpreted as profit-taking or repositioning by crypto traders as they wait for XRP’s next move.
Popular analyst Dom commented on the increased selling volume, pointing out that “a large amount of market selling over the last week” is why XRP failed to sustain upward moves.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.