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XRP MVRV Flashes Death Cross: More Decline Ahead?

An analyst has pointed out that XRP has seen a death cross on its MVRV Ratio, a potential sign that a steeper drawdown could be coming.

XRP MVRV Ratio Has Crossed Under Its 200-Day MA

In a new ポスト on X, analyst Ali Martinez has talked about a crossover that has occurred in the Market Value to Realized Value (MVRV) Ratio of XRP. The “MVRV Ratio” refers to an on-chain indicator that tells us how the Market Cap of the asset compares against its Realized Cap.

The Realized Cap is a capitalization model that calculates the cryptocurrency’s total value by assuming the ‘real’ value of each token in circulation is equal to the price at which it was last transacted on the blockchain. This is different from the Market Cap, which takes the current spot price as the same one value for the entire supply.

As the last transaction of any token is likely to denote the last point at which it changed hands, the price at its time could be considered as its current cost basis. Thus, the Realized Cap, which adds up this value for all coins, is essentially the sum of the capital that the investors have put into the asset.

Since the MVRV Ratio compares the Market Cap, which can be thought of as the current value held by the investors, against this initial investment, it provides a measure of the profit-loss balance of the market.

When the value of the indicator is greater than 1, it means the holders as a whole are sitting on some net unrealized profit. On the other hand, it being under the cutoff implies the dominance of loss on the blockchain.

Now, here is the chart for the XRP MVRV Ratio shared by the analyst that shows the trends in its daily value and 200-day moving average (MA) over the past year:

XRP MVRV Ratio

As displayed in the above graph, the XRP MVRV Ratio has remained above the 1 mark (corresponding to 0% on the chart’s scale), suggesting the overall market has been in the green recently.

There have been some fluctuations within this profitable region, however, like earlier in the year when the metric witnessed a drawdown during which it slipped below its 200-day MA.

With the price surge in July, the indicator managed to recover back above the line, but after the latest decline, it has once again crossed below it. “The MVRV ratio flashed a death cross for XRP, suggesting a steeper correction could be underway!” explains Martinez.

It now remains to be seen how the cryptocurrency’s price would develop from here, given the formation of this bearish crossover.

XRP Price

At the time of writing, XRP is trading around $3.00, down around 6.5% over the past week.

XRP Price Chart


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