XRP Price Faces Pressure as Market Demand Fades Near $2

At that time, the price action triggered numerous predictions suggesting that XRP’s price could continue to rise. However, that has not happened.

Instead, XRP has lost 4% in the last seven days. Is this decline a temporary setback, or will the asset continue to hit lower lows?

XRP On-Chain Metrics Turn Against Bulls

From an on-chain perspective, XRP registered an increase in network growth on Jan. 9. However, at press time, the metric had significantly decreased.

Network growth measures an asset’s adoption by tracking the number of new addresses making their first successful transaction on the blockchain. In most cases, an increase in this metric means higher demand.

Sometimes, it also serves as a prerequisite to a price increase. Thus, the recent decline indicates that new demand for the altcoin is fading, indicating decreasing traction on the XRP Ledger (XRPL).

If sustained, then XRP’s price might fail to retest the six-year high it reached about a month ago.

Another indicator supporting the decrease is the price-Daily Active Addresses (DAA) divergence. This metric compares the user engagement around a cryptocurrency to the price action.

Typically, when the price-DAA divergence is positive, it indicates that user participation is rising alongside the price, signaling a bullish trend. However, a negative divergence suggests that user engagement might not support the price movement, which can be a bearish signal.

As seen below, the metric has dropped to an extremely negative reading. This indicates a dearth of active interaction with XRP compared to the period it experienced substantial price hikes.

Should this trend continue, then XRP could drop below $2 in the short term.

XRP Price Prediction:  Another Decline Imminent

On the technical side, XRP’s price has formed a symmetrical triangle on the daily chart. This symmetrical triangle appears when two trendlines forming lower highs and higher lows converge, indicating indecision in the market.

In most cases, this pattern is neither bullish nor bearish. However, the next direction depends on which trendline breaks first.

At $2.30, XRP price trades near the 20-period Exponential Moving Average (EMA) — in blue. This position suggests that the token risk correction, as dropping below the EMA, could invalidate any hopes of a rebound.

While it still trades above the 50 EMA (yellow), XRP could retest the 0.618 Fibonacci retracement at $1.98. If this happens, the altcoin could drop as low as the 0.382 Fib support floor at $1.41.

However, a breakout of the upper trendline of the triangle might change this trend. In that scenario, XRP’s price might jump to $2.90.

Long-Term Outlook for the Token

A highly bullish scenario backed by a potential XRP ETF could send the price higher than this target. If this becomes a reality, XRP might rally toward the $5 mark.

But still, the possibility of approval depends on Donald Trump’s approach to the crypto industry when inaugurated on Jan.20.

If Trump keeps his promises, the new SEC leadership could approve ETFs.

This could validate the bullish prediction. Otherwise, XRP could slide further down.