Recent on-chain data indicates that the XRP Market Value to Realized Value (MVRV) Ratio has undergone a significant crossover that may have unfavorable implications for the asset’s price trajectory.
XRP MVRV Ratio Has Dropped Under Its 200-Day MA
As highlighted by analyst Ali Martinez in a recent post on X, the latest crossover of the MVRV Ratio could suggest a macro trend shift for XRP. The MVRV Ratio serves as an essential on-chain indicator that tracks the relationship between the market capitalization and the realized capitalization of an asset.
The realized cap represents the true value of a cryptocurrency by measuring the price at which tokens were last transacted, thereby reflecting the total capital expended by investors. In contrast, market capitalization reflects current investor valuation.
By analyzing the MVRV Ratio—essentially a gauge of profit versus loss for the market as a whole—it becomes apparent that when the indicator exceeds 1, investors are profiting overall. Conversely, when the ratio dips below 1, it indicates a prevalence of underwater assets.
The chart shared by the analyst illustrates the movement of the XRP MVRV Ratio alongside its 200-day moving average (MA) over the past several months:
As shown in the graph, the XRP MVRV Ratio has recently experienced a decline, aligning with a price drawdown. Despite this downturn, the ratio remains comfortably above the 1 threshold, indicating that the majority of XRP investors are still in profit. However, it is essential to note that the MVRV Ratio has now dipped below a crucial level: the 200-day moving average.
After maintaining alignment above the 200-day MA throughout late 2024, the recent crossover symbolizes a potential shift in market sentiment. Historical trends indicate that such crossovers often hold predictive value, and this could signify a bearish outlook for XRP.
As the market watches closely, analysts speculate an impending macro trend shift for XRP’s price. It remains to be seen whether the cryptocurrency will continue its downward trajectory, thereby solidifying this pattern.
XRP Price
At the time of this analysis, XRP trades around $2.23, experiencing a modest increase of over 5% in the past week.
