XRP Ledger Sees Sharp Decline In Major Metric That Threatens To Send XRP Price To $0.2

Scott Matherson

11 months ago

3 mins read

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Ripple’s Q2 2024 market report recently highlighted a decline in a crucial on-chain metric that could significantly impact the the XRP price. This decline in network activity and several other factors threaten to send the crypto token to new lows soon enough.

XRP Records Decline In On-chain Transactions

According to the report, on-chain transactions on the XRP Ledger (XRPL) declined by 65.6% in the second quarter of 2024. 86.38 million transactions were recorded during this period, compared to 251.39 million in the first quarter of this year. A drop in the network activity is significant as it highlights investors’ sentiment towards the XRP ecosystem.

This decline in network activity can also negatively impact the XRP price, especially if this trend continues in the third quarter of the year. A plausible explanation for the decline in on-chain transactions for the XRPL in the second quarter is XRP’s underperformance in the first quarter of the year.

High expectations for XRP heading into the new year may have prompted investors to increase their exposure to the crypto, which led to the highs in network activity recorded in the first quarter. However, these investors may have had a rethink as XRP failed to reach new highs even when Bitcoin hit a new all-time high (ATH), leading to a decline in network activity in the second quarter.

The silver lining is that XRP investors have regained their bullish sentiment towards XRP, leading to increased network activity. Bitcoinist recently reported a spike in new addresses and the number of addresses interacting on the XRPL, with these metrics reaching their highest levels since March earlier this year.

The revived bullish sentiment among XRP investors is mainly thanks to the belief that the lawsuit between the US Securities and Exchange Commission (SEC) and Ripple could end soon, presenting a bullish outlook for XRP’s price. However, if that doesn’t happen soon enough, XRP is at risk of witnessing a significant price decline as activity on the XRPL drops.

Other Factors That Could Contribute To A Crash For The XRP Price

The bearish sentiment in the broader crypto market is another factor that could contribute to massive price declines for XRP. Bitcoin is currently struggling to hold above $50,000, and the flagship crypto could send altcoins like XRP crashing if it continues to drop to new lows. XRP is also well-placed to be among the altcoins that will be most affected, seeing how the crypto token has so far reacted to Bitcoin’s recent crash below $60,000.

The conclusion of the lawsuit between the SEC and Ripple could also negatively impact XRP’s price if the remedies awarded against the crypto firm align with the Commission’s proposed remedies. The SEC has asked Judge Analisa to award a fine of $102.6 million against Ripple, which is way above the $10 million that the crypto firm proposed.

At the time of writing, XRP is trading at around $0.46, down over 16% in the last 24 hours, according to data from CoinMarketCap.

XRP price chart from Tradingview.com — XRP price remains low | Source: XRPUSDT on Tradingview.com

Featured image created with Dall.E, chart from Tradingview.com

Scott Matherson

Scott Matherson is a prominent crypto writer at NewsBTC with a knack for capturing the pulse of the market, covering pivotal shifts, technological advancements, and regulatory changes with precision. Having witnessed the evolving landscape of the crypto world firsthand, Scott is able to dissect complex crypto topics and present them in an accessible and engaging manner. Scott's dedication to clarity and accuracy has made him an indispensable asset, helping to demystify the complex world of cryptocurrency for countless readers.

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With years of experience in the crypto market, Scott began to focus on his true passion: writing. During this time, Scott has been able to author countless influential pieces that have drawn in millions of readers and have shaped public opinion across various important topics. His repertoire spans hundreds of articles on various sectors in the crypto industry, including decentralized finance (DeFi), decentralized exchanges (DEXes), Staking, Liquid Staking, emerging technologies, and non-fungible tokens (NFTs), among others.

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