XRP Down 25.96% in Burn Activity Amid Critical Price Reversal

Amid the sudden reversal in XRP’s price movement over the last few hours, the cryptocurrency has seen a major downturn in its key deflationary metric as data from XRPSCAN shows that the amount of XRP burned as transaction fees has reduced to 1,808 on Tuesday, August 5.

The data shows that the amount of XRP burned as fees on the previous day reached a massive 2,442 XRP. As such, the third-largest cryptocurrency by market capitalization has declined significantly by 25.96% in its burn activity over the last day.

XRP payments back to rare lows

While investors’ sentiments have suddenly flipped bearish over the past hours, the decrease in burn rate experienced over the last day follows a significant decrease in on-chain activity on the XRP Ledger.

This has also seen XRP payment volume decline significantly from the level it achieved on the previous day. Notably, the number of XRP payments from one account to another has fallen to 727,329, marking a two-month low in the key on-chain metric.

While the slump in XRP’s deflationary activity coincides with a decline in its payment transactions, it appears that traders’ engagement on the XRP Ledger has slowed down amid the broad market uncertainty.

During the period, XRP has also seen its price retrace to previous lows after surpassing the major $3.1 level during the early hours of the day. On August 5, XRP achieved an intraday high of $3.1028 and fell as low as $2.9654 on the same day.

While it has declined by 2.78% over the last day, data from CoinMarketCap shows that it is trading steadily at $2.97 over the last day.

What’s next for XRP?

With the XRP ETF launch still in view by the SEC, investors are still confident that more upside trend is still underway for the asset despite the broad market pullback.

As such, the declining burn activity may not impact the price performance of the asset in the long term. Nonetheless, market watchers have predicted that if XRP maintains momentum above $3.10, the asset could break out above the $3.55–$3.65 zone.

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