- XRP’s 19% surge surprises despite 70% drop in on-chain activity.
- Speculative buying boosts XRP, raising questions about long-term recovery potential.
- Declining on-chain data contrasts with XRP’s sudden price rebound.
XRP has surprised many by posting a 19% price surge recently, despite a significant drop in on-chain payment activity. The surge followed XRP testing the lower boundary of its multi-month descending channel. The coin’s price quickly bounced back, reaching the $1.60-$1.70 range as buying pressure returned and trading volumes picked up. This movement has led traders to speculate whether this rally is the start of a long-term recovery or just a temporary technical bounce within a larger downtrend.
On-Chain Activity Decline Raises Questions About Sustainability
While the price increase is impressive, the on-chain data tells a different story. Payment counts on the XRP Ledger have plummeted by nearly 70% from recent highs, indicating a sharp slowdown in transactional activity.
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This is often seen as a negative signal, as lower payment volumes suggest reduced cross-border payment flows, weaker settlement activity, and decreased demand for XRP’s utility. These factors typically put downward pressure on price, making it unusual to see a rally under such conditions.
Speculative Interest Drives the Short-Term Rally
Despite the concerning decline in network usage, the XRP price rally may be more about market positioning than any significant fundamental growth. After an extended period of downward movement, markets often become oversold, and opportunistic traders may jump in, driving a sharp rebound. Short covering and liquidation cascades can also play a role in such sudden rallies. As a result, the recent price jump might be driven by speculative interest rather than a genuine increase in demand for XRP’s utility.
For the rally to be sustainable, XRP’s price would need to rise alongside a stabilization or recovery in on-chain activity. If payment volumes on the XRP Ledger start to rebound, the price movement could signal a more lasting trend reversal. However, if transactional activity continues to decline and the price stalls below key resistance levels, XRP could return to consolidation or even retest recent lows.
The Road Ahead: Will XRP’s Momentum Sustain?
Traders are closely watching whether this surge will lead to further momentum or if the recovery remains fragile, dependent on speculative forces rather than real network growth. Volatility is expected to remain high in the coming weeks as market participants assess whether XRP can maintain its upward trajectory.
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