XRP Market Dynamics: From Rally to Retracement
XRP, a standout performer during the 2024–2025 bull market, is now facing a significant slowdown. On-chain data reveals a 65% drop in daily active addresses, signaling shifting investor sentiment and reduced network engagement.
Key Metrics Highlighting the Decline
- Peak Activity: 63,389 active addresses (January 16, 2025)
- Current Activity: 22,859 active addresses (April 3, 2025)
This contraction follows a period of intense speculation, where XRP’s price surged 485% between November 2024 and mid-January 2025, fueled by optimism around Ripple’s regulatory prospects.
Factors Behind the Network Activity Drop
1. Retail Investor Frenzy and Subsequent Cooling
- Initial Surge: Daily active addresses grew 432.6% during the bull run, driven by retail investors anticipating favorable crypto policies.
- Realized Capitalization: Jumped from $30.1B to $64.2B, with 62.8% held by new investors (Glassnode data).
- Risks: High concentration of recent buyers raises vulnerability to market volatility.
2. Eroding Market Confidence
- Profit/Loss Ratio: Steady decline since January 2025, indicating rising losses and fewer profitable exits.
- Speculative Risks: New investors face panic sell-off risks as network activity wanes.
XRP’s Current Market Position
Despite dipping below $2** briefly, XRP rebounded to **$2.13 (5% intraday gain). External factors like geopolitical tariffs added to market uncertainty, but the token demonstrated resilience.
👉 Explore Real-Time XRP Price Trends
FAQ Section
Q1: Why did XRP’s network activity drop by 65%?
A: The decline reflects reduced retail interest after a speculative peak, with newer investors now facing losses.
Q2: What triggered XRP’s 485% price surge in 2024–2025?
A: Hopes for Ripple-friendly regulations and broader crypto market optimism drove the rally.
Q3: Is XRP’s current price level sustainable?
A: While volatile, XRP’s rebound suggests underlying demand, though long-term stability depends on adoption and regulatory clarity.
Strategic Insights for Investors
- Monitor On-Chain Data: Track active addresses and realized cap for sentiment clues.
- Diversify: Mitigate risks linked to XRP’s retail-driven volatility.
👉 Learn About Portfolio Diversification Strategies
Analysis by Emma, Crypto Journalist | MA in Communication & Media Studies
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