Ripple, a popular cryptocurrency, recently made significant movements in the market that have caught the attention of investors. Two large transfers of XRP, totaling $782 million, were made to unknown wallets, signaling potential strategic accumulation or heightened volatility in the near future. The price of XRP has seen a 2.98% increase in the past 24 hours, trading at $2.20 at the time of writing.
Despite the price recovery, on-chain metrics show a divergence in user activity. While the price of XRP has been increasing, daily active addresses have fallen to 17.2K and transaction count has dropped to 302K. This decline in user engagement raises concerns about the sustainability of the current price levels. It may indicate speculative momentum rather than organic growth, which could impact the long-term trajectory of XRP.
On the positive side, on-chain exchange flow data shows a modest net positive balance, with $122.62 million in inflows against $116.44 million in outflows. This accumulation suggests cautious optimism among market participants, with buyers potentially positioning themselves ahead of a breakout. The Network Value to Transaction (NVT) ratio for XRP has also dropped, indicating improved utility and a healthier network.
The MVRV Long/Short Difference for XRP sits at -24.72%, suggesting that long-term holders are currently experiencing unrealized losses. This historically aligns with bottoming phases and increased accumulation, pointing to a market that is undervalued from a holder perspective. Additionally, short sellers faced significant liquidations, outpacing long liquidations, creating a mini short squeeze and reinforcing bullish momentum.
XRP is currently trading just below the upper boundary of a descending channel, with key resistance at $2.40. A successful breakout above this level could propel the price towards $3.00, signaling a reversal of the multi-month downtrend. Strong support remains at $2.06, giving bulls room to defend the trend if momentum stalls. The convergence of whale activity, short liquidations, and improved valuation metrics suggest that XRP is approaching a critical inflection point.
The coming days will be crucial in determining whether XRP can break through and sustain a rally or face a failed breakout. Investors will need to closely monitor the market to gauge the potential for renewed bullish momentum in XRP.