XRP Struggles for Momentum as Investor Interest and Profitability Decline

XRP Struggles for Momentum as Investor Interest and Profitability Decline. Source: Shutterstock

XRP has traded sideways for several days, showing little sign of breaking out amid sluggish market conditions. The cryptocurrency continues to consolidate near key support levels as broader market weakness and declining investor activity weigh on sentiment.

Recent on-chain data reveals a notable drop in new XRP addresses, signaling diminishing interest from new investors. Earlier this month, wallet creation hit a four-month high but has since plunged to around 6,336, according to Glassnode. This decline in participation suggests that potential buyers see limited upside at current price levels. With fewer new entrants, XRP’s liquidity could weaken, making it harder for the token to regain upward momentum.

At the same time, profitability among long-term holders is shrinking. The MVRV Long/Short Difference has dropped to nearly 3%, indicating reduced gains for experienced investors. Historically, declining MVRV ratios have aligned with fading confidence and increased selling pressure, both of which could threaten XRP’s price stability.

Currently, XRP trades around $2.32, holding slightly above its critical $2.28 support. Despite multiple attempts, the token has struggled to sustain a breakout above $2.36. If bearish pressure intensifies, XRP could extend its consolidation phase between $2.28 and $2.13, with a decisive drop below $2.13 likely reinforcing a short-term bearish trend.

However, a shift in investor sentiment could change the narrative. Stronger inflows and renewed confidence might help XRP flip the $2.36 resistance into support, opening a path toward $2.45 or even $2.52. For now, XRP remains in a delicate position, balancing between potential recovery and further correction.