3
Since the attempted upswing collapsed at $1.1 three weeks ago, $XRP has traded within a steep descending channel.
This trend strengthened even further on the 12th of August, when $XRP recorded a daily close of $1.000 for the first time since 2024 before slightly rebounding.
Although the altcoin had breached the $1 support the previous day to $0.99, it shortly bounced back.
As of this writing, $XRP was trading around $1.0082, down 1.5% on the daily charts. Over the same window, the altcoin’s trading volume dropped 28%, indicating reduced market activity.
Is shrinking user base driving $XRP down?
With $XRP trading over 69% below its January peaks, the question that lingers is what’s causing the market weakness.
Santiment Intelligence attributed this market weakness to a lack of new users. As such, while network activity has slightly risen, the user base has not expanded at all.
Santiment observed that new addresses are flat, holding between 2,260 a day in August versus 2,270 in July.
On the other side, daily active addresses have jumped from 26,400 through July to 35,700 in August so far. This suggests that existing holders have increased their usage, as they transact even more.
In fact, transactions have held within an upward trajectory. According to CryptoQuant data, $XRP’s transaction count has risen consecutively the past six days, rising from 1.3 million to 2.49 million.
Such a sustained uptick implies that users have been extremely active during this extended period. However, these market conditions suggest that no new market players have been incentivized to enter.
Previously, when $XRP was rising on the price charts, it was backed by a new user base. For example, when it traded above $3 early in 2025, new users averaged 10k and above 13k in 2025 and 2024.
This implies that with no fresh demand, the altcoin is likely to continue, exhibiting strong downside pressure.
What about the open market?
In addition to a shrinking user base, $XRP is facing intense selling pressure. In fact, the altcoin’s Exchange Supply Ratio has been on a continued rise, hitting 0.026.
This metric reached such levels last in late June, marking over a 6-week high. When this metric is on the rise, it means sellers are outweighing buyers.
Often, such a market setup has preceded stronger downside momentum. The Awesome Oscillator (AO) confirms this trend.
AO has held negative for two consecutive weeks, suggesting sellers enjoy total control of the market. Often declining AO signals, the potential for the trend to continue.
If this pressure persists, $XRP is finally likely to close below the $1 support level. However, ATR shows the market volatility has decreased; thus, price swings are becoming smaller.
If that’s so, $XRP will continue to hover around $1 until it finds enough strength for an upside move.
Final Summary
- $XRP recorded a daily close of $1.000 for the first time since November 2024, before slightly rebounding.
- $XRP has continued to decline due to weakened fundamentals, as it fails to attract new users and intense selling pressure from existing ones.
news.bitcoin.com