XRP Market Value to Realized Value (MVRV) Ratio Has Dropped Below Its 200-Day MA

On-chain data shows the XRP MVRV Ratio has just gone through a crossover that may not be positive for the asset's price.

On-chain data shows that the XRP Market Value to Realized Value (MVRV) Ratio has just gone through a crossover that may not bode well for the asset's price.

XRP MVRV Ratio Drops Below 200-Day MA

As pointed out by analyst Ali Martinez in a new post on X, the MVRV Ratio's latest crossover could signal a macro trend shift for XRP.

The "MVRV Ratio" is an on-chain indicator that tracks the ratio between a given asset's market cap and its realized cap. The realized cap is a capitalization model that calculates the cryptocurrency's "true" value by assuming that any token on the network has a real value equal to the spot price at which it was last transacted.

The previous transaction price of any coin can be regarded as the price at which its investor purchased it, so the realized cap represents the total amount of capital that the asset's holders collectively invested to acquire their holdings. In contrast, the market cap tells us what value the investors are holding the asset at in the present.

Since the MVRV Ratio takes the ratio between these two metrics, it essentially denotes the profit-loss status of the market as a whole. The indicator being greater than 1 suggests that investors are holding the asset for more than they invested, while it being lower than 1 implies a dominance of underwater tokens.

Here is a chart shared by the analyst that shows the trend in the XRP MVRV Ratio and its 200-day moving average (MA), which highlights the crossover:

The XRP MVRV Ratio has seen a decline due to the drawdown that the cryptocurrency's price has encountered, as visible in the graph above.

Although the price has crashed, the indicator is still holding above the 1 level, which signifies that the investors of the asset are still largely in the green. However, one crucial level that the metric has crossed due to the downtrend is the 200-day MA.

The MVRV Ratio broke above this level in the last few months of 2024 and remained above it until this breakdown. From the chart, it's evident that the previous crossover proved to be a bullish signal for XRP.

Now, with the reverse crossover occurring, the analyst has noted that another potential macro trend shift could be ahead for the cryptocurrency's price. It remains to be seen if the asset will continue to decline and confirm the pattern.

XRP price is currently trading at around $2.23 with an uptrend in the last 24 hours.