XRP Network Activity Plunges 50% What’s Driving the Crash?

- Number of Active XRP Addresses Halves from 200,250 to 100,169 - XRP Price Drops 33.01% Over 30 Days; Legal Uncertainty and Whale Sell-offs to Blame [Unblock Media] The recent steep decline in the number of active addresses on the XRP network has caught the attention of investors. The number of active addresses has almost halved, from 200,250 in December to 100,169 recently. The overall slump in the cryptocurrency market is cited as a major reason for the decline in XRP network activity. As major altcoins, including Bitcoin, have shown poor performance, overall investor sentiment has weakened, negatively impacting XRP. Over the past 30 days, XRP's price has fallen by 33.01%, and it has seen a 5.69% drop in the last 24 hours. The daily trading volume was recorded at around $5.74 billion. During market instability, investors tend to exhibit risk-averse behavior, leading to a decrease in network activity. The ongoing lawsuit between Ripple and the U.S. Securities and Exchange Commission (SEC) has also impacted investor sentiment. The continued legal uncertainty has made investors hesitant to buy XRP, resulting in decreased transactions on the network. The lawsuit outcome is likely to be a critical factor in determining XRP's future. If Ripple wins, XRP could potentially be traded again on major U.S. exchanges, attracting more institutional investors. Conversely, if Ripple loses, regulatory uncertainty could deepen, negatively affecting XRP's market share. An analysis of large transaction data revealed that some whales (large investors) have been selling XRP. Large sell-offs can add selling pressure on the market and contribute to price declines. Particularly, movements by whales directly impact network transaction activity. When investors with significant holdings sell XRP, market liquidity fluctuates, potentially leading smaller investors to sell as well. Another challenge XRP faces is the rise of competing coins. Recently emerged coins like Corium (CORE) and Flare Network (FLR) are gaining attention in the market due to their strengths in interoperability and scalability. Specifically, Flare Network emphasizes the utilization of decentralized data and Ethereum Virtual Machine (EVM)-based scalability, threatening XRP's market share. The rise of these new competitors is diverting investor interest and contributing to the decrease in network activity. The future of XRP appears to hinge on several major variables. The outcome of the Ripple and SEC lawsuit will influence the possibility of re-listing on U.S. exchanges and regulatory risks, and the overall rebound of the cryptocurrency market will be another key factor. Additionally, if XRP strengthens its ties with the traditional financial system and expands solutions for institutions, network activity may increase again. Currently, XRP's fully diluted market capitalization is approximately $20.53 billion, with a market cap of $11.89 billion. In the face of market volatility and regulatory issues, continued attention to the future direction of the XRP network is necessary.