The XRP network is experiencing a significant slowdown in on-chain activity, with its token burn rate plunging to near-zero levels as the broader cryptocurrency market correction deepens. Data from on-chain analytics platform CryptoQuant reveals a dramatic drop in the amount of XRP burned as transaction fees, falling from 333 XRP on January 17 to less than 100 XRP within just 24 hours, representing a decline of over 50%.
This sharp reduction in fee-driven burn activity is a strong indicator of decreased network demand, particularly for payment purposes. Analysts note that such notable drawdowns often coincide with broader market pullbacks, which is precisely the current scenario. The slowdown in on-chain metrics has been accompanied by severe price weakness for XRP.
The asset has broken below the crucial psychological support level of $2 for the first time this year, dropping to a session low of $1.84 during the market selloff. As of the latest data, XRP is trading around $1.97, reflecting a 3.55% decline over the past day. The market-wide correction has been aggressive, with the total cryptocurrency sector capitalization shedding approximately $150 billion in just five days, shifting overall investor sentiment from euphoria to extreme caution.
The volatility has hit leveraged traders particularly hard. According to Coinglass data, XRP recorded over $29.7 million in long position liquidations in a single day, contributing to total crypto market liquidations of $30.86 million. A staggering 96% of these derivative market losses impacted traders who were betting on a price increase. The speed of the decline triggered automatic sell orders and margin calls, accelerating the bearish spiral. Despite this, the long-to-short ratio on major exchanges like Binance remains high, indicating that many traders still anticipate a potential rebound.
The weak on-chain movement, coupled with reported poor performance from XRP ETFs in their latest daily trading sessions, casts uncertainty on the token's ability to resume its bull run in the near term. However, some investors remain optimistic about a potential price breakout for XRP despite the current slow network activity and market headwinds.
