XRP’s recent surge might be on shaky ground as crucial on-chain indicators hint at a potential downturn. As of July 2025, the cryptocurrency, which has been riding a wave of investor enthusiasm, now faces possible headwinds. Analysts are pointing to rising Dormancy Flow and an overbought Relative Strength Index (RSI) as red flags for a price pullback.
Signs of a Cooling Rally
The Dormancy Flow indicator, a metric that tracks the average age of coins being moved on the blockchain, is climbing. A rise in Dormancy Flow typically suggests that long-term holders are starting to move their assets, often a precursor to selling. “It’s a classic sign,” notes crypto analyst Emily Carter. “When you see Dormancy Flow rising, especially alongside an overbought RSI, it’s like the market’s giving you a heads-up.” This aligns with observations in our recent analysis of profit-taking on XRP, where traders are capitalizing on the current market conditions.
The RSI, a momentum oscillator that measures the speed and change of price movements, is also in territory that many traders consider overheated. When the RSI surpasses 70, as XRP’s currently has, it often signals that an asset has been overbought, increasing the likelihood of a market correction. “Traders should remain cautious,” Carter adds. “The RSI doesn’t lie—it’s flashing warning signs right now.”
Historical Context and Market Sentiment
XRP isn’t new to this kind of volatility. It has seen multiple peaks and troughs over the past few years. Remember the epic rise in late 2020 followed by the swift decline? Such patterns are not uncommon in the crypto realm. The current situation seems to echo past instances, where bullish runs faced abrupt reversals. As explored in our recent coverage of bots influencing XRP’s price volatility, automated trading could be a factor in these rapid market shifts.
Market sentiment, too, plays a significant role. The current enthusiasm around XRP can partly be attributed to its legal victories in the ongoing lawsuit with the SEC. Recent rulings have injected optimism into the community, pushing prices upward. However, some skeptics argue that this legal boost might be more of a temporary adrenaline shot than a long-term growth factor.
The Road Ahead: What to Watch
What’s next for XRP? Investors should keep a close eye on these on-chain metrics. Dormancy Flow and RSI aren’t the only indicators—other factors like trading volumes and macroeconomic conditions will also influence XRP’s trajectory. “It’s crucial to consider the broader market environment,” says blockchain strategist Alex Nguyen. “Interest rates, regulatory news, even global events could sway crypto prices.”
Moreover, with the crypto market’s notorious unpredictability, it’s difficult to make definitive predictions. Will XRP manage to stabilize and defy these indicators, or are investors in for a bumpy ride? The uncertainty is palpable, and as always, the crypto landscape is in constant flux.
In the coming months, stakeholders will be scrutinizing every move in the ripple effect—pun intended—of XRP’s price dynamics. The key will be to balance optimism with caution, staying informed and adaptable in an ever-evolving market. As the saying goes in the crypto world: expect the unexpected.
Source
This article is based on: XRP’s Rally May Be Running Out of Steam—Here’s What On-Chain Data Shows
Further Reading
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Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
