XRP's Undervalue Could Fuel Bullish Surge Amidst Mixed Sentiment

XRP's recent classification as a "zombie token" and indicators of undervaluation have been accompanied by declining organic demand and user activity. Key on-chain metrics such as velocity and network growth have trended downward, and transaction volume in profit has decreased. However, the weekly weighted sentiment remains positive, and dormant circulation has been muted, suggesting that a large wave of selling may not be imminent.

XRP's Undervalued State and Possible Bullish Traction

Ripple's XRP, the native cryptocurrency of the XRP Ledger, has been a subject of mixed sentiments lately. Amid concerns over its classification as a "zombie token" and criticisms of being overvalued, XRP has witnessed a significant shift in its weighted sentiment that could potentially empower the bulls.

On-chain metrics reveal a concerning decline in key indicators, such as velocity and network growth. The dwindling number of transactions and new addresses created on the network suggest a reduction in user activity and organic demand. This, coupled with the declining ratio of transaction volume in profit, paints a picture of subdued market sentiment.

However, the 30-day MVRV ratio for XRP remains negative, indicating that the asset is undervalued in the short term. This undervaluation could provide a foundation for a potential rally, particularly if supported by a sustained increase in the mean dollar invested age. However, a breakthrough past the $0.7 resistance level may require a combination of positive market sentiment and increased investor confidence.

A positive note emerges from the recent analysis of XRP's weighted sentiment, which has turned positive. This shift in sentiment could indicate a growing belief in the token's recovery potential. Additionally, the absence of a significant spike in dormant circulation suggests that a substantial wave of selling may not be imminent.

Despite the challenges posed by declining on-chain metrics, XRP's undervaluation and favorable sentiment create a promising foundation for potential bullish traction. If the mean dollar invested age continues to rise and the positive sentiment persists, XRP bulls may gather the necessary strength to drive a rally that could overcome the $0.7 resistance.

Investors should closely monitor the evolution of on-chain metrics and market sentiment to assess the likelihood of a sustained recovery for XRP. A combination of positive indicators could signal the arrival of a bullish phase for the cryptocurrency.