XRP Experiences Significant Decline in Transaction Fees
XRP, an altcoin that saw substantial gains last year, has recently been in the news due to its declining performance. This decline is not limited to its price; XRP transaction fees have also seen a significant decrease. Analysts suggest this trend could precede a deeper price correction for XRP.
According to on-chain data provider Glassnode, the total daily transaction fees on the XRP Ledger (XRPL) have experienced a considerable drop since the beginning of the year. Data indicates that XRP transaction fees have fallen to levels not seen since December 2020, averaging around 650 XRP per day.
Glassnode reported: "The total daily transaction fees paid on XRP have dropped from approximately 5,900 XRP on February 9th to around 650 XRP." This represents an 89% decrease compared to the levels observed since December 2020.
Sharp Drop in XRP Futures Open Interest
In addition to the decrease in transaction fees, XRP futures open interest (OI) has also experienced a sharp decline. Glassnode noted that OI saw a 59% decrease, falling from 1.75 billion XRP in early October to 0.74 billion XRP.
Decreased Confidence Among Derivatives Market Investors
Furthermore, XRP funding rates have fallen from 0.01% to 0.001% (7-day moving average). Analysts interpret this as a sign of reduced confidence among derivatives market investors regarding XRP's potential for recovery.
Technical Analysis Suggests Further Price Correction Risk
Recent technical analysis by market observers has identified a descending triangle pattern forming on XRP's price chart. This pattern suggests a potential risk of the price falling further, with analysts projecting a possible decline to $1.73.