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Ripple (XRP) critical threshold: Whales are selling, indicators are warning!
Although there has been an expectation of a correction in the XRP price since its explosive rise in November, this has not yet occurred. However, according to onchain data, $XRP may be overvalued compared to current market conditions.
About a month ago, the XRP price exceeded $ 1 after a long break. While some analyzes predict that the #XRP price could reach $ 5, onchain data shows that this target may be reached. One of the indicators that coincides with this thesis is the Network Value and Transaction Rate (NVT) ratio.
The NVT ratio measures the ratio of an asset's market value to transaction growth. When the ratio decreases, it means that transactions on the network are growing faster than its market value. This usually indicates that the asset's price is undervalued and has potential to rise.
However, an increase in the NVT ratio indicates that the market value is growing faster and the asset is entering overvalued territory. According to Santiment data, XRP’s NVT ratio is currently at 477, indicating a high value.
Another similar indicator is the discrepancy between price and daily active addresses (DAA). The price-DAA discrepancy compares the level of user interaction with the price increase. When the indicator increases, it indicates that user interactions are supporting the price movement, which is a positive sign.
However, the DAA discrepancy is currently down by minus 326.1 3 percent, indicating that the number of wallets interacting with XRP is decreasing. As long as this data continues, the XRP price could fall below $2.
Although there has been an expectation of a correction in the XRP price since its explosive rise in November, this has not yet occurred. However, according to onchain data, $XRP may be overvalued compared to current market conditions.
About a month ago, the XRP price exceeded $ 1 after a long break. While some analyzes predict that the #XRP price could reach $ 5, onchain data shows that this target may be reached. One of the indicators that coincides with this thesis is the Network Value and Transaction Rate (NVT) ratio.
The NVT ratio measures the ratio of an asset's market value to transaction growth. When the ratio decreases, it means that transactions on the network are growing faster than its market value. This usually indicates that the asset's price is undervalued and has potential to rise.
However, an increase in the NVT ratio indicates that the market value is growing faster and the asset is entering overvalued territory. According to Santiment data, XRP’s NVT ratio is currently at 477, indicating a high value.
Another similar indicator is the discrepancy between price and daily active addresses (DAA). The price-DAA discrepancy compares the level of user interaction with the price increase. When the indicator increases, it indicates that user interactions are supporting the price movement, which is a positive sign.
However, the DAA discrepancy is currently down by minus 326.1 3 percent, indicating that the number of wallets interacting with XRP is decreasing. As long as this data continues, the XRP price could fall below $2.
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
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