In a noteworthy development, XRP's MVRV indicator – one of the pricing tools favored by technical analysts – has just signaled a 'golden cross', a rare phenomenon that preceded two strong price increases of 630% and 54% for this cryptocurrency.
MVRV: A technical signal not to be underestimated
The MVRV indicator tracks the ratio between market capitalization and the actual capitalization of an asset, thereby reflecting the current valuation compared to its intrinsic value. When this index surpasses a significant threshold – especially in a 'golden cross' pattern – it often signals that the asset is entering a phase of positive revaluation and could reverse sharply upwards.
At the time of writing, XRP is trading around the $3.25 mark, continuing to hold steady above strategic support zones. The rare technical signal re-emerging, combined with the gradually improving market sentiment, has bolstered expectations for a new price breakout in the near future.
Fibonacci and resistance levels: A gateway for a breakout?
The daily chart shows XRP testing the Fibonacci retracement level of 0.618 at $3.30, with nearby resistance levels just above at $3.46 (Fibonacci 0.786) and $3.66.
Breaking through the $3.46 barrier will be a crucial turning point, opening the path towards the $4.23 target – a price level not seen since previous growth cycles. Notably, the MACD indicator remains above the signal line, indicating that upward momentum is still in effect.
However, previous rejections near the $3.46 mark indicate that selling pressure is still present, and sustained buying volume will be essential to successfully break through key resistance levels.
Deep NVT drop: Improved network performance?
Another positive factor is XRP's NVT ratio – an indicator measuring the relationship between market value and on-chain trading volume – which has decreased by 46.1% in the last 24 hours, down to 95.88. This is a sign that on-chain activity is increasing while market capitalization remains stable – a positive indication that trading value is 'catching up' with valuation.
Traditionally, a low NVT is often associated with higher network efficiency and short to medium-term price potential. When combined with technical signals, this further reinforces the argument for the continuation of XRP's upward momentum.
Short squeeze: 'The trigger' for the next price increase?
Data from CoinGlass shows that short positions on XRP have been liquidated with total losses amounting to $3.03 million, while long positions only lost $290,000. This means that the sellers were forced to buy back tokens to close their positions, causing a 'short squeeze' effect – a phenomenon often followed by strong and rapid price increases.
However, high volatility also comes with risks: If the next price squeeze occurs without sustainable buying pressure, the price could quickly reverse in either direction.
Analysis of the liquidation heatmap from Binance shows dense liquidity clusters appearing in the price range of $3.40 to $3.48 – coinciding with important short-term resistance levels. This will be the 'battlefield' between buyers and sellers in the upcoming sessions.
If buying pressure is strong enough to break through these levels, XRP could enter a new acceleration phase as selling pressure above gradually decreases. Conversely, if rejected, the market may witness a short-term technical pullback, helping to solidify the price level before retesting the resistance zone.
Not just a technical phenomenon, the 'golden cross' of the MVRV indicator has historically preceded XRP's price surges – including increases of 630% and 54% in prior cycles. The current appearance could be an early warning for a new breakout, especially when reinforced by improved network performance, strong technical momentum, and favorable liquidations for buyers.
However, for this scenario to materialize, XRP must decisively overcome the $3.46 barrier, with the support of continuous buying inflow. If successful, this cryptocurrency could well establish a new growth cycle in the coming weeks.