Unexpectedly, there has been a noticeable increase in XRP’s on-chain activity, and the cryptocurrency’s burn rate has reached levels not seen in months. The data demonstrates a steady increase in the quantity of XRP tokens burned as fees, with daily burn levels occasionally hitting 4,000 XRP in May. This increase in burned XRP usually indicates increased network-wide transaction activity, indicating that more users are actively utilizing the blockchain.
Increases in a token’s burn rate typically indicate an increase in network usage, which may indicate better fundamentals. This abrupt increase in burn rate for XRP may signal a price retracement, particularly if growing usage is not the result of fleeting hype but rather natural demand.
The market has been unable to break out of the multi-week range despite the general weakness of altcoins, and the price action of XRP itself has been comparatively steady around the $2.33 mark. Currently, the asset is trading just above its 100-day EMA, or about $2.29, which has historically served as a dependable support zone. The 200-day EMA, which is below it at $2.06, is still a significant long-term pivot.
If the momentum continues, indicators such as the RSI – which is currently at 55 – are still well outside of overbought territory and could rise for another leg. There is still a psychological barrier, though, as the price has not yet returned to the highs recorded earlier this year. The consistent volume of payments on XRP Ledger, which has remained robust throughout May, is another important component.
In conjunction with the consistent increase in burned XRP, this indicates that the surge in network activity is not merely a temporary anomaly. To put it briefly, the market may be emerging from its recent slumber, as indicated by the rising burn rate.
If maintained, this might serve as the foundation for a more significant upward movement, which could propel XRP out of its current stagnation phase and into a new era of momentum. Whether this uptick turns into a larger rally or fades into the background will be determined in the coming weeks.
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