XRP’s bullish surge above the $2.95 price threshold contrasts sharply with concerning network activity trends, stoking fears about market sustainability. Blockchain data reveals a 50% plunge in active addresses coinciding with the rally, signaling potential vulnerability to volatility triggers.
Technical indicators show XRP entering overbought territory with a relative strength index (RSI) reading exceeding 84. This extreme positioning heightens risk of price correction through mean reversion as buying momentum decouples from fundamental on-chain usage.
The significant divergence between price appreciation and declining network participation raises alarms about liquidity conditions. Reduced transactional activity combined with unresolved regulatory pressures creates conditions susceptible to abrupt market shifts.
Analysts warn that prolonged suppression of network metrics threatens the rally’s durability. Meaningful recovery in active address engagement emerges as critical for establishing stable price support amid current overextended conditions.