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Why is XRP price up today?

XRP's daily active address count has soared to its second-highest level in May, raising traders' anticipation for a price rally.

The price of XRP (XRP) rose 6% to $0.51 on May 30 as the market's attention turned toward the latest spike in XRP network activity.

XRP/USD hourly price chart. Source: TradingView

XRP's daily active addresses count near record high

The XRP network witnessed a sudden increase in the daily active addresses (DAA) — the number of unique addresses involved in XRP transactions daily.

For instance, on May 27, around 490,000 addresses interacted with the XRP network. That amounted to the second-largest address activity on the XRP blockchain, just three months after establishing the record DAA count of 880,000, according to data resource Santiment.

XRP DAA vs. daily price chart. Source: Santiment

Interestingly, the DAA surge to a record high in March preceded a 45% price rally. This fractal may have prompted traders to speculate on a similar upside move after the latest DAA count rise.

This is primarily because of how the market interprets the DAA indicator. It considers a rise in active addresses as bullish for the concerned token. Conversely, a drop in active addresses is considered bearish.

Nonetheless, history presents the DAA indicator as a flawed one. For instance, the spikes in XRP's DAA count between November 2021 and April 2022 coincides with the token's price decline, as shown in the chart below.

XRP DAA count throughout history. Source: Santiment

As a result, XRP remains at risk of declining, primarily because of an uncertain macroeconomic outlook that could hurt the crypto sector broadly.

XRP eyes a 20% decline in June

From a technical standpoint, XRP could drop in the coming weeks as the token retests its multi-month horizontal trendline resistance for a potential pullback.

XRP/USD weekly price chart. Source: TradingView

If a retreat occurs, XRP price may aim for its multi-month ascending trendline support as its primary downside target. That could theoretically take the price to around $0.40, down 20% from current price levels.

Related: Bitcoin reclaims $28K, and charts suggest ARB, XRP, EOS and AAVE could follow

Conversely, a breakout above the horizontal trendline resistance could trigger an ascending triangle reversal breakout, pushing XRP price toward $1, as illustrated below.

XRP/USD weekly price chart. Source: TradingView

A potential Ripple win in the ongoing lawsuit against the U.S. Securities and Exchange Commission (SEC may prompt such a breakout move.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.



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