XRP’s Overvaluation Could Hinder Its Return to All-Time High

From beincrypto by Abiodun Oladokun

XRP has witnessed a notable rally in the past week, climbing by 35%. The altcoin currently trades at $3.10, slightly below its all-time high of $3.41.

However, on-chain data suggests the token may be overvalued at its current price point. This raises concerns about its ability to break above its all-time high (ATH) as profit-taking straightens among traders.

XRP’s Overvalued Status Could Trigger More Selloffs

XRP’s market value to realized value  (MVRV) ratio highlights its overvalued status, standing at 409.47% at press time, according to Santiment data.

The MVRV ratio evaluates whether an asset is overvalued or undervalued by comparing its market value to its realized value. A positive ratio indicates the market value exceeds the realized value, suggesting overvaluation. Conversely, a negative ratio means the market value is below the realized value, indicating the asset is undervalued compared to its original purchase price.

At 409.47%, XRP’s MVRV ratio shows that its market value is 409% higher than its realized value — the price at which tokens were last moved or acquired. In simpler terms, this means that, on average, investors who  purchased XRP  are seeing a 409% profit compared to their initial purchase price. This could prompt increased selling pressure.

Notably, XRP’s negative Balance of Power (BoP) confirms that this profit-taking is already underway. At press time, this sits at -0.83.

The BoP measures the relative strength of buying versus selling pressure in the market. When the BoP is negative, it indicates that  selling pressure outweighs buying . It suggests that more investors are looking to liquidate their positions than to accumulate, which could lead to downward price movement.

XRP Price Prediction: Selling Momentum Threatens to Push Price Lower

As selling activity gains momentum,  XRP’s price will fall  further from its all-time high. According to readings from its Fibonacci Retracement tool, the altcoin’s price could drop to support at $2.45. 

Conversely, a shift in the market trend toward accumulation would invalidate this bearish projection. In that case, XRP’s price would rally to its all-time high and attempt to break above it.