XRP daily active addresses rose to a second high in May, increasing traders’ anticipation of a bull run.
The price of XRP jumped 6% to $0.51 on May 30 as market attention turned to the latest spike in XRP network activity.
XRP DAILY ACTIVE ADDRESSES NEARLY ACHIEVE A RECORD HIGH
The XRP network has seen a sudden increase in the number of daily active addresses (DAA) — the number of unique addresses that participate in XRP transactions on a daily basis.
For instance, on May 27, about 490,000 addresses interacted with the XRP network. It was the second largest address activity on XRP, just three months after setting a record number of DAAs of 880,000.
Interestingly, the DAA surged to a record high in March ahead of the 45% rally. This fractal may have led traders to speculate on a similar upside move after the latest DAA count increased.
This is mainly due to the way the market interprets the DAA index. It considers an increase in active addresses as a bullish trend for the token concerned. Conversely, a decrease in the active address is considered a discount.
However, history shows that the DAA is a flawed indicator. For instance, the spike in XRP’s DAA count between November 2021 and April 2022 coincided with the token’s price drop, as shown in the chart below.
As such, XRP remains at risk of a decline, mainly due to an uncertain macroeconomic outlook that could broadly harm the crypto sector.
XRP GOING TO 20% OFF IN JUNE
From a technical standpoint, XRP could fall in the coming weeks as the token retests multi-month horizontal trendline resistance for a potential pullback.
If a pullback occurs, XRP price could target multi-month ascending trendline support as its primary downside target. That could theoretically bring the price down to around $0.4, a 20% drop from current prices.
Conversely, a breakout above the horizontal trendline resistance could trigger an ascending triangle reversal breakout, pushing XRP price towards $1, as illustrated below.
A potential victory by Ripple in its ongoing lawsuit against the US Securities and Exchange Commission (SEC) could spur such a disruptive move.