Warning: XRP Price Risks Sharp 45% Drop to $1.20
Attention XRP holders and crypto enthusiasts! The outlook for XRP price is flashing caution signs, with a significant potential downside move on the horizon. Technical patterns and on-chain data suggest that a notable drop could be underway, potentially sending XRP price much lower.
XRP Price Forms Bearish Descending Triangle
Looking at the daily chart, XRP price has been tracing out a clear descending triangle pattern since its late 2024 rally. This pattern is defined by a horizontal support line and a downward-sloping resistance line. In technical analysis, when this pattern forms after an uptrend, it often signals a bearish reversal. The textbook target for a breakdown below the support is calculated by measuring the triangle’s maximum height and projecting it downwards from the breakdown point.
Currently, XRP is testing crucial support levels. The 50-day Simple Moving Average (SMA) around $2.18 is proving to be a challenge for bulls. A sustained move and close below both the 50-day SMA and the 100-day SMA at $2.06 could open the door to the psychological $2.00 level. If this key support fails to hold, the descending triangle pattern suggests a potential decline towards the $1.20 area by the end of May. This target represents a roughly 45% drop from recent levels and aligns with previous analysis warning of a potential fall to $1.61 if support breaks.
However, it’s not all downside risk. A decisive breakout above the descending triangle’s resistance line, also near the $2.18 level, would invalidate this bearish setup. Such a move could instead position XRP for a rally towards the $3.00 psychological resistance.
Declining XRP Network Activity Adds Pressure
Adding to the bearish technical signals is the significant drop in XRP network activity. On-chain data from Glassnode highlights a sharp decline in daily active addresses (DAAs) on the XRP Ledger over the past two months compared to the first quarter of 2025.
In March, the network saw a peak of 608,000 DAAs, indicating robust user engagement and transaction volume. However, this metric has fallen dramatically through April and into early May, now hovering around 30,000 DAAs. This reduced activity suggests lower transaction volume and potentially waning interest or confidence in XRP’s immediate prospects.
Historically, a decline in XRP network activity often precedes periods of price stagnation or decreases, as reduced user interaction can impact liquidity and buying pressure. While XRP saw a 1.17% price drop recently, its daily trading volume increased by 30% to $2 billion. This combination of falling price and rising volume can indicate profit-taking or repositioning by traders anticipating further downside.
Analyst Dom also noted this trend, pointing out that a “large amount of market selling over the last week” has contributed to XRP’s inability to sustain upward momentum.
What This XRP Analysis Means
The confluence of a bearish technical pattern like the descending triangle and declining XRP network activity paints a cautious picture for the near-term XRP price outlook. The potential for a significant drop to $1.20 is a notable risk that traders and investors should consider.
Key levels to watch are the $2.00 psychological support and the $2.18 resistance/triangle trendline. A break below $2.00 reinforces the bearish case, targeting $1.20. A break above $2.18 invalidates the bearish pattern and could signal a move towards $3.00.
Summary: Navigating the Potential Downturn
XRP price faces substantial downside risk, primarily driven by a bearish descending triangle formation and weakening XRP network activity. The potential 45% drop to $1.20 is a significant target if key support levels fail. While a breakout above $2.18 remains a possibility that would negate the bearish outlook, the current technical and on-chain signals warrant careful attention from anyone involved with XRP.
Remember, market movements involve risk, and conducting personal research is essential before making any investment decisions.
