XRP is making waves in the crypto world, with intriguing bullish signals emerging despite some alarming trends in transaction activity.

A Tight Coil: What’s Next for XRP?

Currently, XRP finds itself trading at $2.19, resting just above a crucial support level at $2.08. Key resistances lie at $2.35 and $2.61. The cryptocurrency is forming what can only be described as a large symmetrical triangle pattern, a formation that’s been developing since its explosive rise in late 2024. This tightening price action indicates that a significant move is on the horizon.

Bullish Accumulation or Speculative Pressure?

Despite some stagnation in price movement, there’s strong activity in the spot taker buy volume. A glance at the 90-day Spot Taker CVD demonstrates persistent buying pressure—hinting that investors are gearing up for a potential breakout. However, this buying spree seems to starkly contrast with declining on-chain metrics, raising concerns about the underlying health of the network.

Transaction Counts: The Alarming Decline!

XRP's transaction count recently plummeted to 383K—one of its lowest daily values since March—while network growth has also declined to a mere 892. Such a drop in organic activity is troubling, especially with bullish sentiment sweeping the market. While speculators may be betting on a breakout, the diminishing network activity suggests that users are losing interest.

Is XRP Overvalued?

The NVT Ratio, which evaluates market cap against daily transaction volume, has surged to an astonishing 4510. This spike indicates a grave misalignment where investor speculation seems to have driven prices far beyond actual utility. Without a corresponding increase in transaction volume, XRP could face intense pressure, exposing a potential bubble.

Can Scarcity Save XRP?

Meanwhile, XRP’s Stock-to-Flow ratio is rising sharply, suggesting greater scarcity as the new supply trickles into the market. While scarcity typically supports long-term price increases, in this case, it hasn’t been matched by a rise in demand or utility. Until network activity picks up or institutional interest materializes, this narrative alone may not lift XRP significantly.

The Countdown to a possible Bullish Explosion!

XRP’s ongoing triangle pattern, combined with increasing buy-side volume, signals that a significant breakout may be imminent. However, the concerning on-chain metrics present serious challenges to sustaining any rally. The upcoming weeks will be critical: a breakout with robust volume and recovering metrics could propel XRP towards its mid-term targets, but failing to address these underlying issues could lead to a fleeting surge.

Stay tuned as we monitor this explosive situation in the world of XRP!