Finally, XRP managed to break the long-term downtrend, gaining over 4% on July 9, breaking the descending wedge pattern, which is a bullish reversal pattern.
After weeks of slowing down, this breakout now highlights key resistance levels. But do the on-chain metrics confirm this move?
The number of XRP holders is on the rise
Despite price volatility, the total number of XRP holders has seen a massive increase since the beginning of the year. The number has now reached around 6.64 million, indicating growing interest in this currency over the long term.
This sustainable growth reflects an increase in digital wallet creation and user retention, indicating growing investor confidence over time. While an increase in the number of cryptocurrency holders does not always correlate with immediate price movements, it often supports market strength.
The number of coin holders tracks the total number of unique wallet addresses that hold a non-zero amount of XRP. An increase in the number of coin holders indicates that more users are accumulating or holding XRP over time, which is often seen as a sign of network strength and investor confidence.
XRP appears undervalued according to the MVRV Z-Score
One of the key indicators in XRP's on-chain data right now is the Z-Score (the ratio of market cap to realized value): a measure used to assess whether an asset is undervalued or overvalued compared to its historical fair value. So far, XRP's Z-Score hovers around 2.13, still at the lower end of the historical scale.
Although it is not in a sharp undervaluation area (usually below 1), it is still below the overbought levels above 5-6 that typically precede local peaks. This means that XRP is not overvalued, and the current price trend is likely supported by good supply and demand dynamics.
Increase in the number of XRP holders.
This position supports continued upward movement, especially as the valuation gradually increases, reflecting growing confidence in the market. The MVRV Z-Score compares the current market capitalization of XRP to the average price of its last trade for all cryptocurrencies (the realized value).
The decline in the score indicates that investors are generally holding at a loss or are close to breakeven, suggesting the potential for gains. An increase in the Z-score (but not too high) indicates improved sentiment and increased profitability, both of which could lead to an upward trend.
The wedge breakout has been confirmed: XRP faces resistance
XRP's price has surpassed the upper trendline of its descending wedge at $2.29, currently trading near $2.39. However, it faces immediate resistance at $2.48.
If the bulls can push through, the next potential targets are at $2.60, $2.83, and eventually $3.13. However, traders should exercise caution. A drop below $2.26 - the previous resistance level that turned into support - could invalidate this breakout.
Any drop below $2.08 will confirm a deeper retracement, bringing XRP back into a consolidation phase. To regain its true momentum, XRP must hold above $2.26 and turn $2.48 into a support level. Until then, the rise remains unstable.