XRP’s slide toward the two-dollar mark is attracting fresh scrutiny as analysts point to collapsing transaction fees and weakening derivatives activity as potential drivers of a deeper correction.
The altcoin moved closer to $2 after weeks of declining network activity, with new on-chain metrics suggesting user engagement has reached levels not seen since 2020.
The trend has raised questions about whether traders are bracing for further downside or positioning for a broader shift in sentiment.
Transaction Fees Hit Levels Last Recorded in 2020
Data from Glassnode indicates that daily fees paid on the XRP Ledger have plunged dramatically since early 2024.
According to the analytics firm, total fees have fallen to roughly 650 XRP per day, down sharply from 5,900 XRP recorded on February 9.
Glassnode described the drop as an 89% decline, noting “This marks an 89% decline to levels last seen since December 2020.”
The latest figures reflect a sustained slowdown in user activity, even as other networks have seen more stable or rising fee metrics throughout the year.
Derivatives Traders Signal Caution
The slump in network fees mirrors a steep reduction in XRP futures open interest.
Open interest has fallen to 0.74 billion XRP from 1.75 billion XRP at the start of October, representing a more than 50% wipeout in active positions.
Funding rates have also slipped, with the seven-day moving average falling from 0.01% to 0.001%.
This combination suggests derivatives traders are becoming increasingly cautious about XRP’s short-term recovery prospects.
Social sentiment has also deteriorated, slipping into what analysts call the “fear zone,” with levels of doubt and negative commentary not seen since early autumn.
Some market observers argue that such pessimism has previously preceded large rallies in XRP, though others say current trading patterns do not yet indicate a turnaround.
Key Technical Pattern Points to Potential Decline Toward $1.73
Technical indicators continue to suggest weakness in the XRP/USD pair.
Analysts highlight a descending triangle pattern forming on the daily chart, a setup that often signals a bearish continuation.
If XRP breaks below the key support zone around $2, traders warn it may confirm the triangle and trigger a slide toward lower price targets.
The measured move for the pattern, calculated by adding the triangle’s height to the breakdown point, is estimated at $2.20, signaling the potential for a 15% drop from current levels.
Market watchers note that the area between $2 and $1.98 remains crucial, as losing this zone could open the door to declines toward $1.61.
Market Eyes Whether Support Can Hold
Despite the negative indicators, some traders believe XRP may find temporary stability if buyers defend support strongly enough.
Previous tests of the $2 region have attracted significant demand, though current macro conditions and falling derivatives activity may complicate efforts to rebuild momentum.
Until transaction fees and open interest show convincing signs of recovery, analysts expect XRP’s price to remain under pressure.
