XRP Stuck at $2.04 — What’s Holding Back the Breakout?

XRP is still challenged for a recovery despite bouncing back recently. The cryptocurrency has been trading in a descending wedge for a few months, a pattern that is viewed as bullish if it can break out to the upside. However, XRP’s attempted breakout of this was rejected today at $2.04, which is the upper boundary of the wedge.

 This has now become a significant resistance area. To make matters worse, the long upper wicks on the candlesticks at this resistance showed good selling pressure. This means the bulls pushed for higher prices, but were rejected by sellers. Until XRP can sustain a daily close above $2.04, the trend is still bearish.

On-Chain Data Signals Weak User Engagement

Although the price can exhibit bouts of strength, XRP’s on-chain activity underlines a more cautious state of affairs. A metric of note, Daily Active Addresses (DAA) divergence, is currently at a staggering -273%. In other words, price is rising, while actual user involvement adheres to the baseline. A strong divergence between price and usage often signals that a price increase is supported by speculative trading and not by increased usage/adoption. Historically, these disconnections have preceded steep price corrections. It may prove difficult to maintain any bullish momentum without user growth in direct relation to movement in price.

High NVT Ratio Suggests Overvaluation

Another red flag is XRP’s Network Value to Transactions (NVT) ratio, which has surged to 474.93. The NVT ratio compares a cryptocurrency’s market value to the volume of transactions conducted on its network. A high NVT typically signals that a token’s market cap is growing faster than its real-world usage. In XRP’s case, the elevated NVT ratio points to overvaluation. If this trend continues without a noticeable increase in transaction volume, it could signal an impending correction. For XRP to sustain its recent gains, the gap between market value and actual usage must narrow—either through increased network activity or a price pullback.

Large Whale Transfers and Liquidations Raise Concerns

Recent whale activity has added another layer of uncertainty. On April 9, a massive transfer of 230.77 million XRP (worth over $414 million) was detected between unidentified wallets. While such movements can indicate internal shuffling or institutional activity, the lack of transparency makes it hard to assess whether it’s bullish accumulation or a bearish signal. Meanwhile, data from Coinglass reveals that $2.1 million in long positions were liquidated compared to only $705K in shorts. This imbalance suggests that many traders were overly bullish and got caught off guard. If XRP fails again at the $2.04 resistance, further long liquidations could deepen the downturn.

Outlook: XRP Struggles to Break Free

All in all, XRP is unlikely to break above the $2.04 level anytime soon. The technical pattern, weak on-chain metrics, high valuation, and uncertain whale behavior all point to ongoing challenges. Unless these indicators improve across the board, XRP will likely remain trapped below this key resistance for the foreseeable future.