The cryptocurrency market is no stranger to volatility, and XRP, one of the most widely recognized digital assets, may be on the brink of a significant correction. Recent on-chain data suggests that growing supply pressure and weakening demand could push the price of XRP lower in the coming weeks—potentially as early as March.
With a surge in daily issuance and declining network activity, key indicators are flashing warning signs. While short-term momentum shows some bullish intent, structural weaknesses in demand and investor sentiment suggest a downside risk remains high.
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Rising Supply Increases Selling Pressure
One of the most immediate concerns for XRP investors is the sharp rise in daily issuance. According to on-chain analysis by AMBCrypto, Ripple’s native token has seen a daily issuance of 1.16 billion XRP at the time of writing.
This increasing circulation means more tokens are entering active trading. Historically, higher issuance correlates with increased selling pressure—especially when holders take profits after a price rally.
In contrast, low issuance typically indicates that fewer holders are moving their tokens, often a sign of strong holding sentiment or accumulation. The current trend, however, points in the opposite direction.
With billions of XRP now circulating daily, it suggests that traders—particularly those who bought at lower levels—are likely cashing out. This dynamic can overwhelm buying interest, especially if new demand fails to keep pace.
Weak Demand Signals From On-Chain Metrics
Despite trading at around $0.59, XRP is showing signs of weakening demand across multiple on-chain indicators.
One critical metric is the number of active addresses—a reliable proxy for real user engagement on the network. According to data from Santiment, daily active addresses have dropped to 29,800, down from over 35,000 on February 29.
This decline indicates reduced transactional activity and fewer unique users interacting with the Ripple network. In simple terms: fewer people are using XRP for transfers or payments.
A shrinking user base often reflects deteriorating market confidence. When traders lose interest in a network’s utility or future prospects, they tend to move capital elsewhere—contributing to downward price pressure.
MVRV Ratio Hints at Undervaluation—but Demand Lags
Another powerful on-chain indicator, the Market Value to Realized Value (MVRV) ratio, currently stands at 1.10 for XRP.
The MVRV ratio helps determine whether an asset is trading above or below its historical cost basis:
- A ratio below 1.0 suggests the asset is undervalued (trading below average acquisition cost).
- A ratio above 1.0 indicates it's overvalued.
- At 1.10, XRP is barely above its realized value—implying minimal profit-taking across the network.
While this might seem like a sign of undervaluation and potential accumulation, the context matters. Normally, such readings attract buyers looking for bargains. But in XRP’s case, weak active address growth and rising supply suggest that demand isn’t responding as expected.
This disconnect between valuation and market behavior raises concerns: even if XRP appears cheap, investors aren't rushing in. That lack of buying interest could leave the door open for further declines.
Technical Outlook: Resistance Looms at $0.61
From a technical perspective, XRP shows mixed signals.
The Relative Strength Index (RSI) is currently at 57.65, indicating bullish momentum but not yet overbought conditions. This suggests buyers are still active and attempting to push prices higher.
However, a major resistance level sits at $0.61**. If bulls fail to break through this ceiling, a pullback toward **$0.57 or even $0.55 becomes increasingly likely.
Conversely, a decisive close above $0.61 could reignite upward momentum and target **$0.65** in the short term.
Money Flow Index Shows Capital Influx
Another technical tool, the Money Flow Index (MFI), has recently ticked upward—signaling increased capital inflow into XRP.
Higher money flow typically precedes price increases, as it reflects strong buying volume accompanied by rising transaction value.
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But caution is warranted: MFI gains can be fleeting, especially in low-liquidity environments. If inflows reverse or trading volume dries up, the resulting liquidity crunch could accelerate a sell-off.
Key Factors Influencing XRP’s March Price Action
To summarize, several interrelated factors are shaping XRP’s near-term outlook:
- High daily issuance → More tokens available for sale → Increased selling pressure.
- Declining active addresses → Lower network usage → Weak demand signal.
- MVRV near cost basis → Potential undervaluation, but no accumulation surge.
- RSI below 60 → Moderate bullishness, but resistance at $0.61 may cap gains.
- Rising MFI → Short-term capital inflow, but sustainability unclear.
These dynamics create a fragile equilibrium. Without strong new demand or positive catalysts (such as regulatory clarity or major partnership announcements), the path of least resistance may tilt downward.
Frequently Asked Questions (FAQ)
What causes XRP price drops?
XRP price declines are typically driven by a combination of increased token supply (issuance), reduced network activity (fewer active addresses), negative market sentiment, and technical resistance failures. When selling pressure exceeds buying interest, downward momentum builds.
Is XRP undervalued right now?
Based on the MVRV ratio of 1.10, XRP is trading just slightly above its realized value—suggesting it may be fairly valued or slightly undervalued. However, true undervaluation usually attracts buyers, which hasn’t happened significantly yet due to weak demand signals.
Can XRP recover if it breaks $0.61?
Yes. A confirmed breakout above $0.61 could trigger short-term bullish momentum, potentially pushing prices toward $0.65. However, sustained recovery would require stronger fundamentals—such as rising active usage or institutional adoption.
How does daily issuance affect XRP price?
High daily issuance floods the market with more tokens available for sale. If these aren’t absorbed by new buyers, they create downward pressure on price—especially when combined with profit-taking by early holders.
What is the significance of active addresses?
Active addresses measure how many unique wallets are transacting on the Ripple network daily. Falling numbers indicate declining usage and engagement—often a precursor to price stagnation or decline.
Should I sell XRP before March ends?
Investment decisions should be based on personal risk tolerance and market analysis. Given current bearish signals—including rising supply and falling activity—it may be wise to set stop-loss levels or reduce exposure if you’re holding large positions without a long-term conviction.
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Final Thoughts
While XRP remains one of the most established cryptocurrencies with strong institutional backing and cross-border payment use cases, its near-term price trajectory looks uncertain.
Growing issuance, weakening demand metrics, and technical resistance all point to a heightened risk of a March downturn. Without a surge in buying pressure or positive external catalysts, a drop toward $0.55 is within range.
Traders should monitor key levels closely—especially $0.61 resistance and $0.57 support—while watching on-chain activity for early reversal signals.
For long-term believers, dips may present accumulation opportunities. But for now, caution remains the dominant theme in the XRP market.
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