XRP Faces Continued Downside Risk Amid Bearish Patterns and Whale Sell-Offs

According to Cointelegraph, XRP's price is exhibiting warning signs as it struggles to maintain levels above $3, with bearish technical patterns emerging on its daily chart. This situation is compounded by significant selling activity from large investors, known as whales, and a noticeable decline in network activity. The cryptocurrency's price has been forming a descending triangle pattern since reaching multi-year highs of $3.66, characterized by a flat support level and a downward-sloping resistance line. A recent breakout above the triangle's upper trendline proved to be a false signal, as bulls failed to sustain the price above $3, indicating a lack of strength. If XRP does not reclaim the $3 mark soon, where the 50-day simple moving average (SMA) is positioned, the XRP/USDT pair could potentially drop to the next support level at $2.70. Further declines could see the price reaching the 200-day SMA at $2.5 and eventually hitting the triangle's downside target of approximately $2.06, representing a 31% decrease from current price levels. The descending triangle analysis is further supported by a bear flag pattern on the same timeframe, suggesting a possible decline to as low as $2.40 following the loss of support at $3. Onchain data reveals that large investors have been offloading XRP at the $3 level, booking profits from the recent rally to $3.10. The Supply Distribution metric indicates a sharp drop in the supply held by entities with balances ranging from 1 to 10 million XRP, now owning 6.79 billion XRP, marking a six-week low. These whales have sold over 160 million XRP tokens, valued at over $476 million at current prices, in the past two weeks. This selling activity suggests that these investors anticipate lower prices in the near future, despite potential spot ETF approvals and Federal Reserve rate cuts. Additionally, a significant increase in XRP exchange reserves presents further challenges, as data from Glassnode shows the XRP balance on exchanges rose by 665 million tokens to 3.94 billion on Monday, up from 3.3 billion on August 27. This increase in exchange reserves indicates a higher supply available for selling. Meanwhile, the XRP Ledger has experienced a notable drop in network activity over the past two months. Onchain data from CryptoQuant reveals that daily active addresses (DAAs) have fallen significantly from the July 18 peak of 50,482 DAAs to around 21,000 at the time of writing. This decline in user transactions may signal reduced interest or a lack of confidence in XRP's near-term prospects. New addresses have also decreased from a 2025 high of 11,000 daily to the current count of 4,300, suggesting waning network adoption and user engagement. Historically, declines in network activity often indicate upcoming price stagnation or drops, as lower transaction volumes reduce liquidity and buying momentum.