In a recent post on X, analyst Ali Martinez mentioned the crossover between the Market Value to Realized Value (MVRV) ratio of XRP. The 'MVRV ratio' is an on-chain indicator that shows how the Market Cap of an asset compares to its Realized Cap.

Realized Cap is a capitalization model that calculates the total value of a cryptocurrency by assuming the 'real' value of each circulating token is equal to its last traded price on the blockchain. This is different from Market Cap, which takes the current spot price as the sole value for the entire supply.

Since the last traded price of any token can indicate the last time it was exchanged, the price at that moment can be considered its current cost basis. Therefore, the Realized Cap, adding this value for all coins, is essentially the total amount of capital that investors have invested in the asset.

Since the MVRV ratio compares Market Cap, which can be seen as the current value held by investors, with this initial investment, it provides a measure of the profit-loss balance of the market.

When the value of the indicator is greater than 1, it means that all holders are holding unrealized net profits. On the other hand, an indicator below this threshold implies a dominance of losses on the blockchain.

The following is a chart of the MVRV ratio of XRP shared by the analyst, showing the trend of daily values and the 200-day moving average (MA) over the past year:

As shown in the chart above, the MVRV ratio of XRP remains above 1 (corresponding to 0% on the chart scale), indicating that the overall market has recently been in the green.

However, there have been some fluctuations in this profitable area, such as earlier this year when this index witnessed a decline and fell below the 200-day MA.

With the price increase in July, the indicator recovered back above this line, but after the most recent decline, it has once again cut below this line. 'The MVRV ratio has created a death cross for XRP, indicating a stronger correction may be underway!' Martinez explains.

Currently, we still have to wait and see how the price of this cryptocurrency will develop considering the formation of this bearish crossover.