XRP network participation plunges 50% – A hidden sign of weak demand?

XRP’s network participation weakened significantly over the past two weeks as active addresses dropped from nearly 50,000 to around 25,000. 

The sharp contraction suggested that fewer users interacted with the network, raising concerns about underlying demand. 

Although network activity often fluctuates during periods of uncertainty, the scale of this decline stood out because it erased a substantial portion of recent engagement.

The downturn also coincided with XRP’s struggle to establish a sustained recovery after its June sell-off. 

NVT ratio painted a different picture

While active addresses declined sharply, XRP’s Network Value to Transaction (NVT) Ratio fell to 199.75 after recording a 15.29% daily decline, suggesting transaction activity improved relative to the asset’s valuation.

A falling NVT ratio often indicates that network value has become more aligned with transaction volume. 

In XRP’s case, the decline implied that valuation pressures eased despite weaker address activity. This divergence created an interesting contrast between user participation and broader network efficiency.

Even so, the improvement in NVT did not fully offset concerns surrounding declining active addresses. Network activity remained considerably lower than it had been two weeks earlier. 

Exchange flows favored withdrawals again

Spot flow data continued showing a consistent pattern of exchange withdrawals outweighing deposits. 

At press time, inflows reached approximately $39.11 million, while outflows totaled about $46.76 million, leaving netflows in negative territory. The imbalance suggested that more XRP left exchanges than entered them. 

Such behavior often reflects investors moving tokens into private wallets rather than preparing them for immediate sale. The latest figures pointed to a reduction in exchange-held supply rather than an increase in selling activity.

Recent flow trends also aligned with the broader pattern visible across the chart, where negative netflows frequently dominated despite periodic spikes in deposits. 

Can XRP defend support and reverse course?

At the time of writing, price action remained under pressure as XRP traded near $1.13 after losing the important $1.30 support region earlier this month. 

The chart also showed resistance around $1.37, while a stronger barrier remained near $1.50.

Technical indicators reinforced the cautious outlook. The DMI reading showed the -DI at 27.21, remaining above the +DI at 20.47. This structure indicated that bearish control persisted despite recent rebound attempts. 

Meanwhile, the ADX stood at 27.10, suggesting the prevailing trend retained notable strength. Although XRP held above the major support zone around $1.09, buyers had not yet regained sufficient control to shift the trend. 

XRP could challenge higher resistance levels if support near $1.09 continued attracting buyers, but sellers still controlled the broader trend at the time of observation.

Final Summary

• XRP’s network participation weakened sharply while the price continued defending major support.
• Negative exchange netflows persisted, but sellers still controlled the broader trend.