Crucial on-chain metrics show warning signs that XRP is currently balancing between recovery and collapse. According to recent Highcharts data, one of the most striking trends is the dramatic 90% decline in XRP's payment volume, which fell from over 1 billion XRP on June 7 to only about 114 million on June 8.
This sudden decline in transaction volume is noteworthy and suggests that institutional activity may be slowing down or that demand may be waning. The price chart of XRP does not yet show a complete collapse from a technical perspective. The 200 EMA, which has historically served as a dynamic support, is just above the asset. Following a recent rebound from this line, XRP increased to $2.20, up almost 3.25% for the day.
The price is still trapped between the $2.26 and $2.55 important resistance levels though. Although XRP's recent exit from a descending triangle pattern typically indicates bullish continuation, the failure to hold above moving averages such as the 50 and 100 EMA raises questions about how strong this reversal was. Volume indicators indicate comparatively weak follow-through, indicating bulls lack conviction and price volatility has decreased.
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The narrative of fundamental support is undermined by the sharp decline in payment volume, which is used to gauge actual utility and network activity. In the past, periods of consolidation or even more profound retracements are preceded by abrupt contractions in this measure. Price action may drop toward the psychological support at $2.00 or even lower to $1.80 if it breaks the 200 EMA level, which is currently just above $2.08.
It is important to keep in mind, though, that these metric drops may also be noise caused by single-entity behavior, particularly when institutional users or whales halt operations. The present weakness may only be a shakeout if XRP is able to rebound above $2.20 and make another attempt at the $2.55 resistance with volume support.
At the moment, XRP is balancing on a thin line. The 200 EMA and transaction metrics are what will determine whether this is a trapdoor or a launchpad, so pay close attention to them.
