XRP MVRV Ratio Indicates Potential Drawdown

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 post on X, analyst Ali Martinez discussed a crossover in the Market Value to Realized Value (MVRV) Ratio of XRP. The MVRV Ratio is an on-chain indicator comparing the Market Cap of an asset to its Realized Cap.

The Realized Cap calculates the cryptocurrency’s total value by assuming the ‘real’ value of each token in circulation equals the price at which it was last transacted on the blockchain, differing from Market Cap, which uses the current spot price.

The last transaction’s price indicates the token’s cost basis, and Realized Cap sums this value for all coins, reflecting the total capital invested in the asset. The MVRV Ratio measures the profit-loss balance, where a value greater than 1 indicates net unrealized profit, while below 1 signifies losses.

The chart shared by Martinez shows the trends of XRP’s MVRV Ratio against its 200-day moving average (MA) over the past year. The MVRV Ratio remained above the 1 mark, indicating that the market was generally in profit, although it experienced fluctuations. Earlier in the year, it fell below its 200-day MA but recovered with a price surge in July. Recently, it has declined again, flashing a death cross, suggesting a potential steeper correction could be underway.

XRP Price

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