XRP transaction fees drop 89%: Is price headed below $1.75?

XRP’s (XRP) drop toward $2 was preceded by a significant drop in transaction fees, which analysts said may fuel a deeper price correction.

Key takeaways:

• XRP transaction fees have dropped to 650 XRP per day, levels last seen in December 2020.
• XRP’s descending triangle targets $1.73.

XRP transaction fees drops to five-year lows

The total daily transaction fees on XRP Ledger (XRPL) have dropped significantly since the beginning of the year, according to onchain data provider Glassnode.

Related: XRP needs a Solana-style strategy to keep up: Ripple executive

The total fees paid daily on XRP have dropped to about 650 XRP per day from 5,900 XRP per day on Feb. 9, Glassnode said in a Thursday post on X, adding:

“This marks an 89% decline to levels last seen since December 2020.”

XRP transaction fees. Source: Glassnode

The drop in transaction fees coincides with a sharp drop in XRP’s futures open interest (OI), which has fallen to 0.74 billion XRP from 1.75 billion XRP in early October, representing a 59% flush-out.

Paired with the funding rates dropping to 0.001% from 0.01% (7D-SMA), this suggests reduced confidence among derivatives traders in XRP’s ability to recover.

XRP: Futures open interest. Source: Glassnode

As Cointelegraph reported, social sentiment toward XRP has tanked into the “fear zone,” the most FUD since early October, but some analysts say such a drop could be a precursor for a massive rally in XRP price, as seen in the past.

XRP’s descending triangle targets $1.73

Price technicals for the XRP/USD pair are also showing a potential risk of dropping lower if it completes a descending triangle pattern.

The chart below points to more downside risk if the price breaks below the triangle’s support line at $2.

The measured target of the pattern, calculated by adding the triangle’s height to the breakout point, is $2.20, representing a 15% decline from the current price.

XRP/USD daily chart. Source: Cointelegraph/TradingView

As Cointelegraph reported, the area between $2 and $1.98 remains a key support zone for XRP, and holding is crucial to avoiding further losses to $1.61.

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.