The record $XRP raises a potential warning for traders and investors. The NVT ratio has exceeded 280.
This jump may indicate that the price of #XRP is rising faster than its actual usage on the network, which may suggest that the asset is overvalued.
The Net Value to Transactions (NVT) ratio is the ratio of the market value of a cryptocurrency to the number of daily transactions on its network. A high NVT ratio indicates a decrease in the flow of tokens in the market. This is often interpreted as a sign that hype is outpacing fundamental factors.
On June 19, data from CryptoQuant showed a sharp increase in the NVT ratio for XRP. Meanwhile, the price remained $XRP .
Relatively stable at around $2.167.
For short-term traders, this may mean that a price correction is more likely when trading volume does not increase. Long-term investors may see this as an opportunity to reassess risk exposure.
A rising Net Value to Transactions (NVT) ratio is not necessarily a bullish indicator. In some cases, it may simply indicate that the market is anticipating growth or upcoming developments that have not yet materialized on-chain.
However, in the absence of substantial fundamental reasons, a sudden increase in the NVT ratio is a clear sign that network demand is lagging behind price movement.
Decline in the price of Ripple ($XRP ).
In recent weeks, interest in Ripple (XRP) has increased due to renewed optimism regarding the potential approval of the Ripple Exchange-Traded Fund (XRP ETF). This may be the right time for traders to pay closer attention to both trading volume and market sentiment, monitoring key price levels.
If the rise in the NVT ratio remains without a corresponding increase in network activity, it may exert downward pressure on the price, leading to a decline.
Conversely, if usage starts to catch up, Ripple may stabilize and resume its upward trajectory.
The price of #XRP is currently $2.13, reflecting a slight decline of 1.44% over the past twenty-four hours. Trading volume increased by 37.34% during the same period, reaching $2.59 billion.
Some traders may see the recent decline as a buying opportunity, especially with the potential for price recovery supported by increased trading volume.