XRP Investors May Be Quietly Positioning as On-chain Activity Sends a Powerful Signal

XRP continues to struggle near the lower end of its recent range, but its on-chain data is showing signs of strength amid the weak price action. 

Network activity has risen massively while activity on centralized exchanges has declined. CryptoQuant analyst CryptoOnChain highlighted this, and noted that the pattern could indicate that XRP has entered a bottom-building phase.

XRP On-chain Activity Spikes

Notably, XRP closed at $1.039 on Aug. 8, as it tested the lower boundary of its six-month range. The price had remained under pressure throughout the previous week, falling from the $1.08 area toward $1.02-$1.03. Yet, while the price was losing ground, activity across the XRP network was moving higher.

As confirmed by The Crypto Basic, the network saw 2.6 million successful payments and recorded more than 2.8 million transactions on Aug. 5, an 86% increase week over week and more than 81% above the 30-day baseline. 

Activity remained elevated over the following days, with daily transactions ranging between 1.3 million and 2.8 million during the past week. 

As a result, the seven-day average moved above the six-month average of 1.83 million transactions. Active accounts also rose by more than 5% over 30 days, confirming that people continue to use the network despite XRP’s weak price.

Exchange Activity Moves in the Opposite Direction

Meanwhile, Binance deposit addresses dropped by roughly 96% against their monthly and quarterly baselines. Also, inflows fell 79%, and outflows declined 85% compared with their respective 90-day averages.

This created a gap between on-chain activity and exchange activity. Essentially, XRP’s network is handling a much higher level of activity, yet fewer tokens are moving through exchanges. 

This could mean that selling pressure from exchange-related activity has eased, since fewer XRP tokens are reaching exchanges where holders can sell them. However, the data alone does not confirm that investors have entered a broad accumulation phase.

The derivatives market also shows that speculation has cooled. XRP’s Open Interest declined from about $403 million on July 28 to $391 million on Aug. 8. The leverage reading fell to 0.150, down from a previous high of 0.190. XRP also saw a $3.4 million long liquidation on Aug. 7, when the price dropped to $1.02.

By the following day, funding rates had returned to positive territory at +0.008. This suggests that the market had cleared out weaker long positions without triggering a major wave of panic shorting. 

XRP Still Faces a Major Test at $1

These developments give XRP some of the conditions associated with a potential bottom-building phase. The token has tested support near the bottom of its range, leverage has fallen, exchange flows have weakened, and actual on-chain activity has increased. 

When network activity rises while exchange activity falls at a range low, the pattern can help create a base for localized accumulation instead of another round of capitulation.

However, price action has yet to confirm that scenario. Currently, XRP trades at around $1.007, down 2.5% intraday, as the broader crypto market pulled back and Bitcoin fell below $64,000. Regulatory concerns added to the pressure after the Senate failed to pass the Clarity Act before recess.

The picture also remains weak. All four daily moving averages sit above XRP, which gives bulls several resistance levels to overcome. The first hurdle is $1.036. Above that, the short-term moving averages around $1.07 and $1.09 could limit any recovery, followed by stronger resistance at $1.18.

On the downside, the $0.99-$1.00 zone remains the first major test. A daily close below $1.00 could send XRP toward $0.94, with the wider $0.94-$0.86 demand zone serving as the next major support area.