XRP has failed to register a meaningful recovery in recent days despite widespread attempts to stabilize the market. The altcoin’s recent movement shows growing weakness, with on-chain data indicating a possible overvaluation, which is weakening its momentum.
As the sell signal strengthens, XRP could face further downward pressure in future trades.
Concerning behavior of XRP holders
XRP’s network value-to-transaction (NVT) ratio has risen sharply, suggesting that the recent slight price increase is not backed by actual trading activity. This disconnect between valuation and on-chain utility highlights an increase in trading behavior based on hype rather than the underlying growth of the network. Historically, such situations have often preceded short-term corrections.
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An increase in the NVT ratio typically indicates overvaluation, as market capitalization exceeds actual blockchain usage. In the case of XRP, this pattern indicates that enthusiasm among traders exceeds organic network demand.
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On the macro level, the XRP activity index, a measure of long-term holder (LTH) activity, recorded a notable increase. This rally reflects increased activity in the previously dormant coin, suggesting that long-term investors are starting to sell. This trend signals a change in sentiment among holders, who may be losing patience amidst stagnant price trends.
With the lack of sustained growth, LTH appears to be looking to lock in profits ahead of a potential decline. When experienced holders begin distributing assets, it often indicates a decline in confidence in short-term returns.
XRP price stall
XRP is currently trading at $2.41, holding just above the $2.35 support level but still below the $2.54 resistance. Although market volatility has subsided, momentum indicators remain bearish as selling pressure increases across exchanges.
Considering these factors, if XRP’s weakness continues, it could face a short-term correction. A break below the support at $2.35 could push the price toward $2.27, and further losses could widen to $2.13. Such a move will likely strengthen bearish sentiment in the market.
However, if investor demand increases and purchasing activity returns, XRP could recover from current levels. A successful breakout of the $2.54 resistance level could pave the way for a rally towards $2.64, invalidating the bearish outlook and injecting renewed optimism into the market.
