Ripple price faces risk as meme coins crash and XRP Ledger growth stalls

Ripple (XRP) is currently facing significant challenges, with its price remaining in a deep bear market amid ongoing weakness in the broader crypto industry. The XRP price has fallen by 30% from its January high, erasing much of the gains made earlier this year. This decline aligns with the overall downturn in Bitcoin (BTC) and altcoins, signaling a tough period for the market as a whole.

XRP’s price may continue to face pressure as its ecosystem also experiences a slowdown. Many XRP-related meme coins have seen sharp declines, with the XRP Army token dropping over 30% in the past week. Other tokens such as PHNIX, Sigma, Drop, Pongo, Ripples, and 589 have all seen significant losses, with some dropping more than 60%.

Additionally, data from DeFi Llama indicates that the growth of the XRP Ledger (XRPL) has stalled, with the total value locked (TVL) in the ecosystem stagnating at $80 million since January 28. The XRPL DEX, the largest decentralized exchange on the network, holds the majority of these assets, with $80.3 million in market value. However, there has been little progress in growing the ecosystem beyond this point.

One positive development in the XRP ecosystem is the growth of Ripple USD (RLUSD), a recently launched stablecoin. RLUSD’s market capitalization has grown to $108 million, with a daily volume averaging over $150 million. It was recently added to Zero Hash, a blockchain infrastructure provider, marking a significant step forward. Additionally, there has been a noticeable shift in investor behavior, with XRP tokens being moved off exchanges for self-custody, indicating increased confidence from long-term holders.

From a technical perspective, XRP’s price chart shows ongoing volatility after a strong surge in November, suggesting the coin may be entering the distribution phase of the Wyckoff Theory. According to this theory, assets go through four phases: accumulation, markup, distribution, and markdown. XRP’s performance from 2022 to 2024 was characterized by accumulation, followed by a bullish markup phase in November. The current volatility may signal a transition into the distribution phase, where high volatility leads to the markdown phase with higher supply and lower demand.

If XRP falls below this week’s low of $1.7900, it could confirm that it is entering the markdown phase, indicating further downward pressure. Conversely, if XRP rises above its year-to-date high of $3.3877, it would signal a bullish continuation, suggesting potential for recovery.