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XRP, the digital asset connected to Ripple Labs, has shown fading momentum in burn activity. The declining burn rate suggests no significant reduction in token supply.
Meanwhile, the XRP price is still experiencing a downtrend, shifting farther away from the $3 target.
XRP burn rate activity plummets
According to CryptoQuant data, XRP has fallen drastically in burn rate activity. Notably, the burn rate metric dropped to approximately 741 XRP on Tuesday, Oct. 21.
This marked a sharp decline from the 4,506.9 XRP burnt on Aug. 8, 2025. The XRP burn rate decline this year signals a sharp drop in on-chain activity.
In the first quarter (Q1) of 2025, the burn rate activity held steady, with an average of 2,500 to 8,300 XRP burnt daily. This spike follows hype around institutional partnerships, such as the approval of Ripple’s RLUSD stablecoin in Dubai.
The burn rate spike continued in Q2, with an average of 3,000-4,000 XRP scorched in a day. However, in Q3, the metric crashed to near-zero, with only 163 XRP burned on Sept. 21.
Just a few days later, XRP burns surged 91% to 749 XRP on Sept. 26, before the recent lows. The decline in the XRP burn rate in Q3 followed faded momentum as Bitcoin surged past $110,000.
Essentially, the burn rate is a direct proxy for transaction volume. This means fewer transactions equate to fewer tokens destroyed.
How XRP price reacted
So far, the XRP price has reacted negatively to the low burn activity. As of press time, XRP is down 0.6% over the previous day to $2.40.
The Ripple-backed coin also decreased by 3.27% and 15.54% over the past week and month, respectively.
Low burns mean minimal deflationary pressure, potentially reducing price upside without volume rebound. At current rates, it would take over 100 years to burn just 10% of the total XRP circulating supply.
Therefore, the XRP price risks dipping to the $2.00 support if burn activity remains low.
Crucially, investors and analysts had anticipated the $3 mark as the next bullish XRP target. Now, with the plummeting burn activity, XRP has bounced from $2.50 but remained under the descending resistance.
Additionally, the price is carving a lower-high sequence, making the $3 target difficult to reach. This move aligns with previous bearish sentiments released based on unusual cycle moves.
