XRP Bullish Setup Meets Bearish On-Chain Signal: What Gives?

• Broader market optimism for risk-on assets supports potential XRP upside.
• Speculation includes XRP potentially surpassing Ethereum, targeting >$10 price.
• On-chain data shows a sharp drop in new XRP address creation, raising adoption concerns.

XRP, the digital asset often central to crypto discussions, presents a complex picture right now. Technical analysis of its daily chart against Tether (USDT) reveals a bullish breakout, while on-chain data indicates a concerning decline in network growth.

Supporting the bullish case, market analysts see strong potential for “risk-on assets,” including XRP. They see the market’s current consolidation as a pause before a substantial surge, drawing parallels to past Bitcoin cycles.

Notably, the analysis speculates on XRP’s potential to surpass Ethereum as the second-largest cryptocurrency in terms of market capitalization during a significant bull run. Predictions of XRP claiming a market cap of nearly $1 trillion, potentially translating to a price well above $10 have emerged as well.

On-Chain Data Flashes Warning Signal

However, tempering this view, on-chain data from analyst Ali Martinez paints a cautious picture. Recent figures indicate a significant decline in the creation of new XRP addresses, plummeting from 5,200 to just 2,900 over the past month. 

This decrease in network activity could signal a slowing rate of adoption or waning interest in the XRP ecosystem, a factor that could pose challenges to sustained long-term growth.

Related: XRP Spot Volume Drops 25%, Options Open Interest Plunges 53%: What’s Happening?

XRP Chart Hints at Potential Upside

Looking at the daily chart (via TradingView), the Bollinger Bands illustrate the price action largely contained within their boundaries, with a recent test of the upper band suggesting increasing volatility and a possible attempt to breach the resistance. The upper Band at $2.2 poses resistance to the XRP price action while the middle Band at $2.05 is the nearest support.

The Relative Strength Index (RSI), currently hovering around a neutral 50, needs to climb above 60 to provide further confirmation of bullish momentum alongside a price breakout.

Analysis suggests that a decisive break above the $2.20 – $2.25 level, accompanied by strong trading volume, could propel XRP to higher price targets, calculated based on the height of the triangle’s base. 

Related: Canary Tests SEC: Files First Spot TRX ETF Proposal with Staking

However, failure to break through this resistance could result in a price correction and the loss of the substantial support at $2.