XRP has risen over 600% since November, reaching a market capitalization of approximately $190 billion, as the market assesses the Ripple lawsuit settlement, regulatory clarity in the United States, and the growing momentum of ETFs.
But with such a rapid price increase, are XRP's fundamentals keeping up with the price? Let's take a closer look.
XRP Valuation Is 2,200 Times Higher Than TVL
As of Monday, XRP's parent chain, XRP Ledger (XRPL), has a total value locked (TVL) of $87.74 million, according to DefiLlama.
Trading volume on XRPL's decentralized exchange (DEX) was $49,621 in the last 24 hours, while application fees were just $1,467.
Based on these figures, XRP's market capitalization is over 2,200 times its DeFi TVL and approximately 363,000 times its annual fee revenue.
For XRP speculators, the current valuation reflects confidence in the future growth of XRPL: payment volumes, stablecoin growth, corporate treasury allocations, and ETF flows will increase significantly.
In their view, these dynamics will justify the current price, even if onchain usage remains relatively modest at the moment.
According to data from RWA.xyz, XRPL hosts $175.9 million in tokenized assets, up 52.25% in a month, led by US Treasury bonds ($120.6 million), public equities ($55.4 million), real estate ($4.3 million), and stablecoins ($67.3 million).
This rapid growth rate is ranked as one of the fastest in the Real World Asset (RWA) encoding field, indicating the potential for expanding use cases that could drive future XRP demand.
XRP is considered far behind the leading layer 1 blockchain, Ethereum.
As of Monday, Ethereum's market capitalization has reached over $516 billion, with a TVL of $92.06 billion and generating $10.48 million in daily application fees. Ethereum also leads the RWA rankings with $7 billion in projects under management.
This puts Ethereum's market cap/TVL ratio at 5.6 and its market cap/annual fee ratio at 135, significantly lower than XRPL's.
However, XRP trades at nearly 40% of Ethereum's market capitalization, leading some analysts to call it "overvalued."
XRP Bearish Divergence Suggests 25% Correction
Technically, XRP's recent bullish momentum shows signs of slowing momentum.
A growing bearish divergence between price and the relative strength index (RSI) suggests weakening buying pressure even as prices rally higher, a setup that often precedes corrections.
XRP may face an initial pullback to the 20-2W exponential moving average (EMA 20-2W; purple wave) near $2.32 in September, down over 25% from current prices.
A similar decline followed a bearish divergence signal during the 2017–2018 cycle. The $2.32 level is further notable because it is close to XRP's realized price over the past six months, essentially the average price at which current holders purchased their tokens during that period.
XRP's realized price may act as a magnet if the bullish momentum fades, with a retest potentially shaking out weaker users before any recovery.
However, some technical analysts remain confident that XRP will rise to as high as $10 in the coming months.
This article does not contain investment advice or recommendations. All investment and trading moves involve risk, and readers should conduct their own research when making a decision.
