Key takeaways:
XRP confirms a bearish descending triangle on the daily chart, risking an 18% drop to $2.40.
Declining daily active addresses signal reduced transaction activity and cooling demand for XRP.
Spot taker CVD remains negative, suggesting waning investor demand.
XRP (XRP) traded 23% below its multi-year peak of $3.66, and a convergence of several data points signals a possible drop toward $2.40.
Data from Cointelegraph Markets Pro and TradingView shows XRP trading below a descending triangle in the daily time frame, as shown in the chart below.
A descending triangle is a bearish chart pattern, characterized by a flat, horizontal support line and a descending upper trendline that slopes downward.
The price broke below the support line of the prevailing chart pattern at $2.95 on Tuesday to continue the downward trend, with a measured target of $2.40.
Such a move would bring the total gains to 18% from the current level.
As Cointelegraph reported, the altcoin needs to reclaim the $3 support level to avoid a deeper correction to $2.24. The last two times the price reclaimed this level in the recent past were in mid-July and early August, preceding 25% and 15% rallies, respectively.
XRP/BTC bearish divergence
XRP’s bearishness is supported by a growing bearish divergence between its XRP/BTC pair and the relative strength index (RSI).
The daily chart below shows that the XRP/BTC pair rose between July 10 and Aug. 18, forming higher lows.
But, in the same period, its daily RSI descended to 43 from overbought conditions at 75 over the same time frame, forming lower lows, as shown in the chart below.
Related: Price predictions 8/18: SPX, DXY, BTC, ETH, XRP, BNB, SOL, DOGE, ADA, LINK
A negative divergence between falling prices and a rising RSI usually indicates weakness in the prevailing uptrend, prompting traders to book profits at higher levels as investor interest decreases and buyer exhaustion sets in.
The chart above also reveals that XRP/BTC sits above a key support zone between 0.0000245 BTC and 0.0000250 BTC, embraced by the 200-day simple moving average.
A drop below this area could see the XRP/BTC pair continue its downtrend, fueled by a further drop in XRP price.
Declining network activity could amplify XRP sell-off
The XRP Ledger has experienced a significant drop in network activity compared to Q1/2025 and the period between June and July. On-chain data from Glassnode reveals that the daily active addresses (DAAs) on the network are now far below the numbers seen in March and June.
The ledger recorded a robust 608,000 DAAs on March 19 and 577,134 on June 16, reflecting high user engagement and transaction activity. However, there was a dramatic slump from the end of June through August, as shown in the chart below.
With only around 33,000 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 as lower transaction volume reduces liquidity and buying momentum.
The number of transactions has also decreased by 51% from 2.5 million in June to 1.25 million at the time of writing, per data from CryptoQuant.
Transaction count and active addresses are widely used to estimate the number of users interacting with a network. They offer valuable insights into the network’s overall activity and user engagement, serving as a key indicator of blockchain adoption and interaction with the underlying token.
As such, this significant drop in these onchain indicators might drive XRP’s value lower, sparking speculation that the token could sink deeper in the short term.
Negative 90-day CVD backs XRP’s downside
Analyzing the 90-day spot taker cumulative volume delta (CVD) reveals the extent to which the sell-side activity is intensifying.
CVD measures the difference between buy and sell volume over a three-month period.
Since July 28, selling pressure has dominated the order book, after the XRP/USD pair hit multi-year highs above $3.66 on July 18.
The negative CVD (red bars in the chart above) indicates profit-taking among traders, which signals waning demand as sellers take control.
If the CVD remains red, it means sellers are not backing down, which could set the stage for another leg down, as seen in historical corrections.
With more than 91% of the XRP supply still in profit at current prices, investors could continue locking in gains, adding to the headwinds.
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.
