XRP has been making headlines after a powerful 12% rally over the past month, reclaiming critical resistance levels and restoring bullish sentiment among investors. However, the latest market action shows signs of hesitation. As of the latest trading session, XRP is trading at $3.17, down 1.2% from its recent peak of $3.22.
The spark behind this rally came on August 7, 2025, when Ripple and its executives finally put an end to their long-running legal battle with the U.S. Securities and Exchange Commission (SEC). This case had been one of the most significant clouds hanging over XRP for years, and its resolution immediately reduced legal uncertainty, pushing prices higher.
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🔍 On-Chain Signals Reveal the True Driver of the Rally
While the lawsuit’s conclusion was undeniably bullish, on-chain metrics suggest that the recent price surge wasn’t primarily driven by a flood of new money.
CryptoOnchain, a researcher from CryptoQuant, reports that daily active addresses on the XRP Ledger fell by over 10% post-lawsuit, dropping to just 24,701. This decline in activity — despite the price rise — indicates that the rally was fueled largely by capital rotation from existing holders rather than a wave of new participants.
Without a steady inflow of retail investors, sustaining long-term upward momentum could prove challenging.
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📊 Exchange Flow Data: Profit-Takers vs. Accumulators
Exchange flows paint a more complex picture of XRP’s current market dynamics:
Deposits into Binance and Upbit surged before and after the SEC settlement announcement. Historically, such spikes have often been linked to profit-taking or short-term speculation.
At the same time, withdrawals from exchanges increased, indicating that some investors are still building long-term positions.
This dual activity suggests the market is currently balanced between short-term traders locking in gains and long-term believers accumulating more XRP.
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🌏 The Asian Market’s Growing Influence
Exchange reserve trends also highlight shifting liquidity patterns:
Binance: XRP holdings have rebounded after previous declines, potentially signaling upcoming selling pressure.
Upbit: Reserves have continued to climb steadily, showing that the Asian market is playing an increasingly important role in supporting XRP’s trading volume.
OKX: XRP has been almost entirely withdrawn, leaving minimal reserves on the exchange.
CryptoOnchain warns that rising prices paired with falling active user numbers signal a market increasingly dominated by a smaller group of large traders. If exchange reserves keep growing quickly, the likelihood of a short-term correction will increase — especially if profit-taking intensifies.
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🔮 Outlook: Can XRP Hold Its Gains?
The SEC lawsuit’s resolution is undoubtedly a major milestone for XRP, removing a huge legal overhang and boosting market confidence.
However, for XRP to maintain and extend its recent gains, the following conditions will be key:
1. Attracting new retail participants to fuel fresh demand.
2. Keeping short-term selling pressure in check to avoid deep pullbacks.
3. Maintaining a strong base of long-term holders who can stabilize market sentiment.
If these factors align, XRP could be positioned for another bullish leg. Without them, the asset may face a period of sideways consolidation or a sharper correction.