XRP’s price has been fluctuating around the $2.00 mark, with the altcoin holding above $2.08 at the time of writing. However, increasing volatility in its price action raises the concern that it could slip below the critical $2 level. 

Investors’ sentiment could ultimately determine whether XRP maintains its current levels or experiences a drop.

XRP Holders To The Rescue

XRP has seen a significant spike in active addresses recently, a sign of heightened volatility. Historically, an increase in active addresses correlates with significant price movements. As the number of active addresses grows, XRP’s price action becomes more unpredictable, increasing the chances of a sharp move in either direction.

This heightened volatility reflects the uncertainty surrounding XRP’s future, especially with the altcoin hovering near a key support level. If the active address trend continues to rise, XRP’s price could see a large shift depending on whether it’s met with buying or selling pressure.

The Liveliness indicator for XRP is currently on a consistent downtick, signaling that long-term holders (LTHs) are increasingly accumulating rather than selling. At a six-month low, this indicator suggests that LTHs are confident in XRP’s long-term potential, which provides a stabilizing effect on the price. As LTHs hold their positions, this support can help buffer against extreme volatility.

The accumulation by the LTHs signals that investors are not easily swayed by short-term price fluctuations. This investor behavior is bullish for XRP, as it reflects confidence in the altcoin’s future. 

XRP Price Needs To Find Stability

At the time of writing, XRP’s price is $2.09, holding above the local support level of $2.08. While the altcoin has managed to maintain this level, it remains vulnerable to ongoing market volatility. If the bearish momentum increases, XRP may slip below $2.08, triggering further downward movement.

If the broader market conditions weaken, XRP’s price could fall toward the $2.02 range or even drop to the critical $2.00 level. A drop below $2.00 could trigger panic selling, as this is a psychological support point for many investors. This could exacerbate losses and add pressure to the downside.

However, a bounce off the $2.08 support level could provide the necessary momentum for XRP to rise back toward $2.13. The presence of LTH support could play a crucial role in stabilizing the price and encouraging a rebound. If XRP can flip $2.13 into support, it could invalidate the bearish outlook and move toward $2.23.