XRP continues to weaken around the $1 level, while on-chain indicators are showing signals that suggest the possibility of a bottom forming.

On Aug. 11, blockchain media outlet The Crypto Basic reported that activity on the XRP network rose sharply, while fund movements through centralised exchanges and leverage in the derivatives market fell instead.

The key is the divergence between the price and network indicators. XRP closed at $1.039 on Aug. 8, retesting the lower end of its recent six-month range. It slid from the $1.08 range to $1.02 to $1.03 throughout the previous week, coming under downward pressure, but network usage rose sharply over the same period.

The XRP network processed 2.6 million payments on Aug. 5, and total transactions topped 2.8 million. That was up 86 percent from the previous week and 81 percent above the 30-day baseline. Daily transactions then held in a range of 1.3 million to 2.8 million over the past week. Active accounts also rose more than 5 percent versus the 30-day baseline, showing network usage continued despite the price weakness.

By contrast, fund movements through exchanges fell sharply. The number of Binance deposit addresses fell about 96 percent versus the monthly and quarterly baselines, while inflows fell 79 percent versus the 90-day average and outflows fell 85 percent.

CryptoOnChain, an analyst at CryptoQuant, pointed to this trend as showing the possibility that XRP is entering a "bottom-building phase". If less XRP flows into exchanges, the amount available for immediate selling also declines, which could ease selling pressure, the analyst said.

Even so, it is difficult to conclude from these indicators alone that XRP has entered a full-fledged accumulation phase. XRP is currently trading at around $1.02, and Bitcoin slipping below $64,000 amid a broader cryptocurrency market correction also weighed. Regulatory uncertainty was also cited as a market pressure factor after the U.S. Senate failed to pass the Clarity bill before recess.

Overheating in derivatives markets also eased somewhat. XRP open interest fell to about $391 million on Aug. 8 from about $403 million on July 28. A leverage indicator also slipped to 0.150 from the previous peak of 0.190.

Technically, there is also significant upside resistance. All 4 key daily moving averages sit above the current price, leaving multiple levels to clear in any rebound. The first resistance is $1.036, followed by short-term moving averages around $1.07 and $1.09, and then $1.18 was presented as a stronger resistance zone.

On the downside, the $0.99 to $1.00 zone is the first test. If XRP falls below $1 on a daily closing basis, it could slide to $0.94, and the $0.94 to $0.86 zone is cited as the next major support area.

Ultimately, XRP is weak on price but showing strong network activity. If a pattern of rising network usage alongside falling exchange inflows appears near the lower end of a range, it may be interpreted as a signal that a basis for localised accumulation is forming rather than further capitulation. Whether a bottom is actually forming is expected to be confirmed through defence of the $1 level and a break above key resistance levels.