The $XRP Ledger is flashing a massive macro capitulation signal that has never been observed before in the cryptocurrency's 12-year trading history.
According to data provided by on-chain analytics firm Santiment, average trading returns for $XRP have plunged to unprecedented “pain levels.” On the bright side, this shows a rather strong probability of an eventual relief rally (considering that speculative froth has now been cleared).
Santiment's analysts note that fear and frustration among the community behind the $XRP token are heavily overstretched.
Historically low average returns
The chart provides the $XRP Ledgers 30-day and 365-day market value to realized value (MVRV) ratios over a multi-year timeline.
At the top of the range, red dashed lines mark the “strong sell zones” (previous historical tops with high levels of market euphoria).
Conversely, the lower green dashed lines identify the “strong buy zones”. Both the short-term and long-term MVRV metrics have broken far below this historic buy threshold.
Image via SantimentData
$XRP's 30-day MVRV is currently at -45.34%, which shows just how painful the correction has been for short-term buyers. Long-term holders are not doing any better, with the 365-day MVRV being at -47.13%.
When combined, $XRP has never shown lower average returns across these timeframes at any point.
A historic low does not mean the price cannot grind slightly lower if broader crypto markets face macro headwinds, but it does show that there is some room for growth.
The most profitable long-term setups tend to materialize when the general crowd is feeling maximum financial pain.
What is encouraging is that $XRP exchange-traded funds have seen robust institutional demand despite persistent outflows recorded by Bitcoin and Ethereum ETFs.