XRP Mildly Undervalued on MVRV: What About Bitcoin and Ethereum?

XRP is currently identified as being mildly undervalued based on the 30-day Market Value to Realized Value (MVRV) Ratio. This article provides insights into how XRP stands in comparison to other major cryptocurrencies, specifically Bitcoin and Ethereum, using MVRV analysis to understand the market dynamics and potential investor sentiment.

Key Takeaways

The 30-day MVRV Ratio shows XRP is mildly undervalued at -6.1%.
Ethereum's ratio is at a positive 7.2%, indicating gains for recent investors.
Bitcoin's 30-day MVRV is at 2.4%, suggesting that recent traders are nearly breaking even.
Chainlink and Cardano also show mixed performance, with Chainlink's MVRV at -0.3% and Cardano's at -4.4%.
XRP's current status may indicate potential for future growth as it suggests that profit-takers might have exhausted their options.

XRP

XRP's 30-Day MVRV Ratio Indicates Negative Returns

In a recent analysis posted on X, the on-chain analytics firm Santiment discussed the current state of the 30-day Market Value to Realized Value (MVRV) Ratio for leading cryptocurrencies like Bitcoin and XRP.

The MVRV Ratio is a widely used indicator that compares an asset’s market capitalization to its Realized Cap. The Realized Cap estimates the total value of a cryptocurrency by assuming each token is worth the last price at which it was traded on the blockchain. This metric evaluates the collective capital that investors have used to purchase their tokens. In contrast, the market cap reflects current values, and the MVRV Ratio provides insight into investors' profit-loss situations.

Specifically, we're focusing on the 30-day MVRV Ratio, which highlights the profit-loss situation for traders who have entered the market over the past month.

Here's a chart shared by Santiment that illustrates the trend in the 30-day MVRV Ratio for six different cryptocurrencies: Bitcoin, Ethereum, Cardano, XRP, and Chainlink.

XRP, Bitcoin, Ethereum MVRV Ratio
The variation in the 30-day MVRV Ratio across top cryptocurrencies | Source: Santiment on X

As shown in the graph, the 30-day MVRV Ratio differs significantly across major cryptocurrencies, which indicates that the experiences of recent buyers vary greatly between assets.

Notably, Ethereum shows a positive MVRV of 7.2%, suggesting that recent investors are enjoying gains of this amount. Bitcoin fares slightly lower with a positive rate of 2.4%, meaning that those who entered in the last month are approximately breaking even.

Chainlink maintains a neutral stance with a MVRV Ratio of -0.3%. Meanwhile, Cardano's recent investors are facing larger losses at -4.4%. XRP investors are currently down 6.1%, indicating the lowest profitability among traders in the market. However, this situation might not be entirely negative for XRP.

When investor gains rise, the likelihood of a selloff increases as traders seek to realize profits, which can lead to potential price tops when the MVRV Ratio is high. Conversely, a deep negative value, like XRP’s, may have bullish implications, suggesting that those looking to take profits may have already sold their positions.

The chart provided by Santiment illustrates zones of overvaluation and undervaluation based on the 30-day MVRV Ratio. Currently, XRP is positioned in an undervalued zone, while Ethereum lingers in a mildly overbought area.

Current XRP Price

As of now, XRP is trading approximately at $2.04, reflecting a 1.5% increase over the last 24 hours.

XRP Price Chart
XRP price trend over the last five days | Source: XRPUSDT on TradingView