XRP’s Key Metric Shows 700,000,000 Drop: What Could It Mean?

this week, XRPActivity on the chain has suffered greatly. Recent data shows that payment volume, a key measure of the network’s utility, has fallen by nearly 70%.

XRP transfers between accounts have declined sharply, according to the metric, from more than 700 million daily transactions at the beginning of October to about 230 million at the end of the month. The demand of the network and the general perception of the Ripple ecosystem are called into question by this sharp drop in the transactional flow.

Falling payment volumes: Expectation

The drop in payment volume indicates either a short-term slowdown in remittance or institutional activity, or a more widespread drop in organic usage as the token tries to regain its market share. Periods of price stagnation are historically accompanied by prolonged declines in XRPmetrics on the chain, and the current situation seems to be no exception.

Technically speaking, XRP is currently trading at around $2.49, just above short-term support, but still below significant resistance levels indicated by the 100-day and 200-day moving averages, which are at around $2.78 and $2.81, respectively.

Bearish sentiment prevails

There is still a bearish sentiment present on the asset, as it recently tried to break out of its downward wedge, but was unable to hold above the trend line. The RSI at 45 indicates that the momentum is still weak, although it is in a neutral position and tilting slightly towards bearish territory.

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A noticeable slowdown in the throughput in the chain can limit XRPis upside in the near future. The $2.40-$2.35 area is still important as short-term support for now; if it is lost, there may be another correction towards $2.10 or even lower if selling pressure increases.

A recovery of $2.80 with a verified discovery, on the other hand, would be the first indication of a recovery and a resurgence of network demand. The network may be subject to a period of adjustment after the speculative overuse earlier in the month, which could explain the sharp drop in transaction activity.

But investors should anticipate a period of consolidation or a slight correction before any significant recovery, as technicals and data on the chain warn of caution.