- XRP whale activity hinted at rising liquidity, but volatility risks for Ripple remained elevated.
- Ripple’s NVT Ratio spiked sharply, suggesting XRP may be overvalued and vulnerable to correction.
Ripple [XRP] flashed fresh volatility signals after a major whale moved 29,532,534 XRP—worth $64.4 million—to Coinbase.
This transfer could be a signal of increasing liquidity and possible price movements.
Whale activities can greatly influence market sentiment. When large amounts of XRP are transferred to exchanges, it may lead to sell-offs or accumulation by investors.
User activity slows as traders await new catalysts
Ripple’s network engagement shows bearish signals.
The Daily Active Addresses for XRP dropped to 12,941, signaling a decrease in user activity. Besides, the Transaction Count has also seen fluctuations, dropping to 116.67K recently.
This decline in user engagement could indicate that traders are awaiting more substantial movements or news to drive further price action.
A sustained increase in these metrics could indicate growing adoption, providing a bullish outlook for XRP in the near term.
Source: Santiment
Evaluating XRP market sentiment and network health
The MVRV Long/Short Difference for XRP decreased 19.02%, indicating that long-term holders may be reducing their positions.
This shift suggests that market sentiment may be turning more cautious, with short positions rising.
The decrease in the Long/Short Difference might indicate that traders are adjusting their positions, either due to uncertainty or bearish expectations. A continued decline in MVRV could signal a bearish outlook unless there’s a reversal in market confidence.
Source: Santiment
On top of that, the NVT Ratio jumped a whopping 587.15% in 24 hours, now standing at 446.67.
This sharp increase points to a possible overvaluation of XRP, as market capitalization rises faster than transaction volume.
The NVT Ratio serves as a warning signal for potential price manipulation or speculative activity, highlighting the risk of overvaluation. A high NVT Ratio suggests that the current price may not be fully supported by transaction activity, which could lead to a correction.
XRP’s price action and resistance levels
At press time, the altcoin was testing a key resistance at $2.30, as shown in the latest chart.
XRP has been consolidating between $1.78 and $2.30, with Bollinger Bands suggesting a tightening range, indicating a potential breakout or breakdown.
The MACD shows a neutral stance, suggesting indecision in the market.
If XRP breaks above $2.30 with increased volume, it could signal a bullish trend, with the next key resistance at $2.50. However, a failure to break this level may lead to further consolidation or a potential pullback.
Source: TradingView
Open Interest fluctuation and its effect on market sentiment
Open Interest (OI) for XRP decreased by 1.26% to $3.67 billion.
This reduction in OI suggests that market participants are becoming more cautious, possibly due to the uncertainty in price action and network metrics.
This decline suggested reduced conviction among traders. When OI shrinks, it often signals less aggressive positioning and waning market participation.
Source: CoinGlass
What’s next for XRP
XRP’s market performance shows a blend of caution and potential.
While whale activity and the MVRV analysis indicate volatility, the surge in the NVT Ratio suggests that the current price may be inflated, posing overvaluation risks. Additionally, the decrease in OIst reflects market hesitation.
Despite these factors, XRP remains resilient, with ongoing fluctuations in user engagement and network activity.
The direction of XRP’s price will depend largely on how these factors evolve, especially as traders adjust their positions based on new developments.
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