XRP, which staged one of the strongest rallies in the current bull market, is now showing signs of a significant slowdown. Recent on-chain data reveals a sharp 65% decline in daily active addresses, signaling a substantial contraction in user engagement.
From a peak of 63,389 active addresses on January 16, 2025, the number has fallen to just 22,859 as of early April. This drop marks a significant cooling-off period following a phase of intense speculative activity that saw XRP surge by over 485% between November 2024 and mid-January 2025.
What Drove the Earlier XRP Rally?
The earlier surge in XRP's price and network activity was largely driven by optimistic investor sentiment. Many anticipated that a pro-crypto U.S. presidency would benefit Ripple and its surrounding ecosystem. During this period, daily active addresses increased by over 432%, reflecting massive retail interest.
According to market data, realized capitalization—a measure of the total value invested in the asset—jumped from $30.1 billion to $64.2 billion. Nearly $30 billion of that growth came from capital deployed within just six months, indicating a rapid and concentrated inflow of new investors.
This influx resulted in over 62.8% of XRP’s realized cap being held by investors who entered during that narrow window. While this initially supported price appreciation, it also concentrated wealth among newcomers, many of whom may have bought near the peak.
Signs of a Cooling Market
As enthusiasm began to fade in late February, several on-chain metrics started signaling a shift. The Realized Profit/Loss ratio has been declining since January, indicating that more investors are now realizing losses rather than taking profits—a common precursor to weakening market confidence.
The sharp reduction in active addresses further supports the idea that many recent buyers are now holding underwater positions. This raises the risk of panic selling if the market experiences further downturns.
Despite these concerns, XRP has shown some resilience. After briefly slipping below the key psychological level of $2 amid broader market uncertainty, it rebounded intraday, climbing back to $2.13 at the time of writing.
Market Structure and Retail Behavior
The earlier phase of XRP’s growth was characterized by high retail participation. While this helped fuel the rapid price increase, it also introduced volatility and fragility into the market structure. Retail-driven rallies often lack the stability brought by long-term institutional holders, making the asset more susceptible to sharp corrections.
Moreover, the concentration of holdings among recent buyers means that many have a high cost basis. This increases the likelihood of selling pressure during periods of price consolidation or decline.
The Role of External Factors
Broader macroeconomic and regulatory developments also play a critical role in XRP’s price action. Recent announcements related to global trade policies introduced market-wide jitters, affecting not only XRP but also other major cryptocurrencies.
Nevertheless, the fundamental appeal of XRP and Ripple’s ongoing developments in cross-border payments continue to provide a foundational support level. For those interested in tracking these dynamics in real time, consider using 👉 real-time market analysis tools to stay updated.
Frequently Asked Questions
What does “active addresses” mean in the context of XRP?
Active addresses refer to the number of unique addresses participating in transactions on the XRP network over a specific period. A decline may indicate reduced user activity or loss of interest.
Why did XRP’s network activity drop by 65%?
The drop is largely attributed to cooling speculative interest following a period of rapid price appreciation. Many new investors may have stopped trading as prices consolidated.
Is the decline in active addresses a bearish signal?
While not exclusively bearish, a sustained drop in network activity often correlates with decreased liquidity and investor interest, which can precede further price weakness.
What is “realized capitalization” and why is it important?
Realized capitalization measures the total value of all XRP tokens based on the price when each token last moved. It offers insight into the actual capital invested, rather than just market value.
Did external events affect XRP’s price recently?
Yes, broader market reactions to macroeconomic news—such as new trade policies—contributed to short-term volatility, including XRP’s brief dip below $2.
Can XRP recover from this slowdown?
Market cycles often include periods of consolidation after rapid growth. Recovery depends on renewed investor confidence, positive developments from Ripple, and overall crypto market strength.
In summary, while the decline in XRP’s network activity highlights a pause in its bullish momentum, the asset remains technically and fundamentally relevant. Market participants should monitor on-chain indicators and broader trends to make informed decisions.