The value of XRP has risen by more than 600% since November, reaching a market capitalization of about $190 billion, as the market evaluates the Ripple lawsuit settlement, regulatory clarity in the United States, and increasing momentum for exchange-traded funds.
Daily candlestick chart of XRP's market value. Source: TradingView
But with this rapid price increase, are XRP's fundamentals keeping pace with this rise? Let's take a closer look.
The value of XRP is 2200 times higher than TVL
As of Monday, the total value locked (TVL) in the parent XRP chain, XRP Ledger (XRPL), was $87.74 million, according to DefiLlama.
XRPL Network Metrics. Source: DefiLlama
The trading volume of XRPL on the decentralized exchange (DEX) was $49,621 in the past 24 hours, while order fees amounted to just $1,467.
Based on these figures, the market capitalization of XRP is approximately 2200 times higher than the differential value of DeFi and about 363,000 times higher than annual fee revenues.
For XRP investors, the current valuation reflects confidence in XRPL's future growth: payment volumes, stablecoin growth, corporate treasury allocations, and ETF flows are expected to increase significantly.
From their perspective, these dynamics justify the current price, even if on-chain usage remains relatively modest at this time.
According to data from RWA.xyz, XRPL holds tokenized assets worth $175.9 million, an increase of 52.25% in a month, led by U.S. Treasury bonds ($120.6 million), public equities ($55.4 million), real estate ($4.3 million), and stablecoins ($67.3 million).
The best-performing RWA chain over the past 30 days. Source: RWA.xyz
This rapid growth rate is among the fastest in the real-world asset (RWA) token sector, indicating the potential for expanding use cases that could drive demand for XRP in the future.
XRP is said to lag significantly behind the leading layer 1 blockchain, Ethereum.
As of Monday, Ethereum's market capitalization surpassed $516 billion, with a total net worth of $92.06 billion, and daily revenues of $10.48 million from order fees. Ethereum also leads the RWA rankings, with managed project value at $7 billion.
Ethereum network dashboard. Source: DeFiLlama
This results in Ethereum's market cap to TVL ratio rising to 5.6 and the market cap to annual fees ratio to 135, which is much lower than XRPL.
However, XRP is trading at nearly 40% of the market cap of Ethereum, prompting some analysts to describe it as "overvalued."
The bearish divergence of XRP suggests a correction of 25%
Technically, XRP's recent upward momentum shows signs of slowing.
The increasing bearish divergence between the price and the Relative Strength Index (RSI) indicates that buying pressure is diminishing even as the price moves upward, a setup that typically precedes corrections.
XRP may face an initial pullback to the 20-2W exponential moving average (EMA 20-2W; the purple wave) near $2.32 in September, down more than 25% from the current price.
XRP/USD price chart for two weeks. Source: TradingView
A similar decline occurred after the bearish divergence signal in the 2017-2018 cycle. The $2.32 level is particularly significant as it is close to the actual price of XRP over the past six months, which is essentially the average price at which current holders bought their tokens during that time.
Current XRP price by age. Source: Glassnode
The actual price of XRP may act as a magnet if the upward momentum pulls back, with a possibility of re-testing to shake out weaker users before any rebound.
However, some technical analysts still believe that the price of XRP will rise to $10 in the coming months.
This article does not include investment advice or recommendations. All investment and trading movements carry risks, and readers should conduct their own research before making any decisions.
