XRP Rally Faces Resistance Amid Overvaluation and Selling Pressure

• XRP surged by 35% last week, trading at $3.10, just below its all-time high of $3.41.
• On-chain data reveals an overvalued market position with an MVRV ratio of 409.47%.
• Profit-taking and negative Balance of Power (BoP) indicate selling pressure may push prices lower.

XRP has experienced a strong rally over the past week, climbing by 35% to reach $3.10, just shy of its all-time high (ATH) of $3.41. Despite this bullish performance, concerns are rising about the sustainability of its price due to signs of overvaluation and increased selling activity.

XRP’s Overvaluation Raises Concerns

On-chain data from Santiment reveals XRP’s market value to realized value (MVRV) ratio is currently at 409.47%. The MVRV ratio compares an asset’s market value to the average realized price, offering insights into whether it is overvalued or undervalued.

At 409.47%, XRP’s market value is over four times higher than its realized value, meaning most investors are holding significant unrealized profits. Historically, such high MVRV levels often trigger profit-taking, which could lead to downward price pressure.

Additional metrics, such as XRP’s Balance of Power (BoP), reinforce concerns about increased selling activity. At a BoP value of -0.83, selling pressure is clearly outpacing buying interest, signaling that many investors are looking to liquidate their positions.

A negative BoP suggests that the momentum is shifting in favor of sellers, making it difficult for XRP to sustain its recent gains.

Price Prediction: Bearish Momentum Looms

If the selling momentum continues, XRP’s price could retrace to key support levels. Fibonacci Retracement analysis indicates that $2.45 could serve as the next significant support zone.

On the flip side, if accumulation picks up and buying pressure outweighs selling, XRP could reclaim its ATH of $3.41 and potentially break higher. However, current on-chain and market indicators suggest that a bearish scenario is more likely in the short term.

Market participants are closely monitoring these developments, as XRP’s ability to maintain its upward trajectory will depend on shifts in investor sentiment and trading activity.