Why is XRP price up today?

XRP’s daily active address count has soared to its second-highest level in May, raising traders’ anticipation for a price rally.

The price of XRP (XRP) rose 6% to $0.51 on May 30 as the market’s attention turned toward the latest spike in XRP network activity.

XRP’s daily active addresses count near record high

The XRP network witnessed a sudden increase in the daily active addresses (DAA) — the number of unique addresses involved in XRP transactions daily.

For instance, on May 27, around 490,000 addresses interacted with the XRP network. That amounted to the second-largest address activity on the XRP blockchain, just three months after establishing the record DAA count of 880,000, according to data resource Santiment.

Interestingly, the DAA surge to a record high in March preceded a 45% price rally. This fractal may have prompted traders to speculate on a similar upside move after the latest DAA count rise.

This is primarily because of how the market interprets the DAA indicator. It considers a rise in active addresses as bullish for the concerned token. Conversely, a drop in active addresses is considered bearish.

Nonetheless, history presents the DAA indicator as a flawed one. For instance, the spikes in XRP’s DAA count between November 2021 and April 2022 coincides with the token’s price decline, as shown in the chart below.

As a result, XRP remains at risk of declining, primarily because of an uncertain macroeconomic outlook that could hurt the crypto sector broadly.

XRP eyes a 20% decline in June

From a technical standpoint, XRP could drop in the coming weeks as the token retests its multi-month horizontal trendline resistance for a potential pullback.

If a retreat occurs, XRP price may aim for its multi-month ascending trendline support as its primary downside target. That could theoretically take the price to around $0.40, down 20% from current price levels.

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Conversely, a breakout above the horizontal trendline resistance could trigger an ascending triangle reversal breakout, pushing XRP price toward $1, as illustrated below.

A potential Ripple win in the ongoing lawsuit against the U.S. Securities and Exchange Commission (SEC may prompt such a breakout move.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.