XRP has struggled this year, dropping 41% since January. Yet recent on-chain indicators suggest it might be gearing up for a rebound similar to its big 2024 rally.
The token's Estimated use Ratio (ELR), which tracks leveraged capital on the XRP Ledger, recently hit levels that previously preceded a massive price surge. Back in 2024, the ELR dropped to around 0.05 before a sharp deleveraging event pushed the price up by nearly 790%. Current data from CryptoQuant shows XRP undergoing another phase of deleveraging, with open interest plunging from $10.94 billion last year to just $2.39 billion now, indicating an $8.55 billion withdrawal of leveraged funds from the market.
Still, analysts warn this doesn’t guarantee a repeat rally. Market dynamics can shift, and such patterns aren’t always predictive.
Whales Accumulate as Network Metrics Suggest Undervaluation
Alongside the use flush, whale activity points to a steadier buildup. Large holders have been increasing their average spot order sizes, dominating market influence. Exchange reserves have dipped slightly from 2.62 billion XRP to 2.61 billion since early July, signaling that about $57 million worth of XRP moved from exchanges into private wallets. This typically indicates gradual accumulation rather than quick selling.
Supporting this, XRP’s network value to transactions (NVT) ratio currently sits at 312.8, near the low end of its historical range. A low NVT suggests the token is undervalued relative to its transaction volume, implying the asset has been oversold. Until transaction activity picks up, the market may continue undervaluing XRP, enticing whales to buy at depressed prices.
On-chain metrics like these highlight interesting trends for XRP’s price action, but caution remains warranted. Investors should watch for shifts in use and network usage before drawing firm conclusions.
This article is for informational purposes and does not constitute financial advice.
