- Despite its struggles post-August crypto crash, XRP’s on-chain data suggests it’s undervalued.
- Rising Mean Coin Age indicates long-term investors are holding tight, signaling possible breakout.
Reading Between Ripple’s On-Chain Lines
Over the past week, Ripple’s (XRP) price has stagnated below the $0.55 mark, still grappling with the fallout of the August 17 cryptocurrency market setback. However, while the price trajectory might seem bleak, deeper on-chain indicators tell a story of a potential bullish breakout for XRP.
A Delve into the Underlying Metrics
In the realm of cryptocurrency, the price is just the tip of the iceberg. Underlying on-chain metrics often provide a more in-depth look into the actual health and potential of a crypto asset. Take the Network Value to Transaction Volume (NVT) ratio by Santiment, for instance. This metric gauges the transactional activity on a blockchain network compared to its recent price movements.
From August 18 to August 24, the XRP NVT ratio saw a whopping 340% rise, moving from 51.66 to 226. In layman’s terms, a spike in the NVT ratio like this signifies robust underlying economic activity, even amidst a price decline. The interpretation? External elements, possibly bearish market speculations, are pressing down on XRP’s price. Yet, with such strong on-chain metrics, XRP is arguably positioned at a considerable undervalued stance, poised for gains when the tides turn favorable.
Long-Term Faith in XRP
Beyond the NVT ratio, another metric, the Mean Coin Age, offers insight into the sentiment of long-term XRP investors. This metric calculates the average duration for which coins have stayed stagnant in their respective wallets.
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Recent data shows an intriguing trend. Following the market crash, XRP’s Mean Coin Age plunged to 34.33 but has since seen a 10% ascendancy, reaching 38.30 as of August 24. This uptick is indicative: long-term XRP investors are not ready to part with their holdings at these prices. Should they remain steadfast in their holding strategy, the diminishing selling pressure could be the catalyst for XRP’s price surge.
Looking Ahead: A 20% Jump on the Horizon?
Given the current scenario, if Ripple witnesses a spike in transactional activity and the HODL trend persists among long-term investors, we could anticipate an upswing of around 20%. The Market Value to Realized Value (MVRV) ratio, an instrument analyzing the profit-and-loss stance of present holders, corroborates this sentiment.
However, all potential gains come with associated risks. If XRP descends below $0.45, the bears might retain their dominance. Historical patterns suggest that a dip could push some investors towards limiting their losses, potentially aiming to cease selling around the $0.48 range. But should that support falter, we might witness XRP retracting beneath $0.40.
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