XRP's Rollercoaster Ride: Bulls Eye Recovery Opportunity

XRP Swings From Overvalued to Undervalued—Can Bulls Spark a Recovery?

XRP, the native cryptocurrency of the Ripple network, has experienced a rollercoaster ride in recent days, swinging from overvalued to undervalued territory. The price surge, triggered by President Donald Trump's announcement of its inclusion in a proposed cryptocurrency reserve, was short-lived, as profit-taking led to a decline, pushing XRP back into undervalued levels.

Market Value to Realized Value (MVRV) ratios, assessed over multiple moving averages, suggest that XRP is currently undervalued. According to Santiment, as of this writing, the token's seven-day and 30-day MVRV ratios are -6.85% and -6.36%, respectively. An asset's MVRV ratio identifies whether it is overvalued or undervalued by measuring the relationship between its market value and its realized value. When an asset's MVRV ratio is positive, its market value is higher than the realized value, suggesting it is overvalued. Conversely, when the ratio is negative, the asset's market value is lower than its realized value, indicating that the coin is undervalued compared to what people originally paid for it.

Historically, negative MVRV ratios present a buying opportunity. Traders view them as a signal to buy the asset at discounted prices and hold to sell when the market sees a resurgence in bullish pressure. Therefore, XRP's MVRV ratios currently flash a buy signal for those looking to "buy the dip" and "sell high." Moreover, despite XRP's price decline since Sunday's high, its funding rate remains positive, highlighting the optimism among its futures market participants. At press time, this is at 0.0004%.

XRP, down 10% in the past 24 hours, currently trades at $2.37. If market participants heed the buy signal and new demand enters the market, it could propel the altcoin toward resistance at $2.93. A successful breach of this level could cause XRP to reclaim its all-time high of $3.40, which was last reached on January 16. On the flip side, if it maintains its current downtrend, XRP’s price could fall to $2.