During December, XRP’s NVT ratio experienced significant fluctuations, signaling unpredictability. The sharp increase in the ratio at present indicates a disparity between XRP’s value and the actual transaction volume on its network.
At its current price of $2.23, the elevated NVT ratio implies that the market cap growth is surpassing the network’s practical usage, a sign of bearish sentiment. Without a corresponding rise in transaction activity, XRP may encounter increased risks of correction, potentially challenging the positive momentum witnessed recently.
XRP: Declining network engagement?
The divergence between Price and Daily Active Addresses (DAA) unveils a worrying trend in XRP’s recent upswing. This measure evaluates whether price shifts align with user participation on the platform.
While XRP’s price has surged to $2.23, the DAA difference has declined by 326.13%, indicating a significant reduction in the number of active XRP wallets engaged with the cryptocurrency.
This substantial diversion implies that the current price upsurge lacks substantial support from on-chain operations.
If user involvement remains subdued, it could weaken XRP’s bullish trajectory and elevate the likelihood of a notable price correction, placing its ongoing rally at risk.