On-chain data reveals that the XRP Network Value to Transactions (NVT) Ratio has experienced recent spikes, indicating notable developments for the asset. Earlier this month, the ratio reached a high of 1,162, as reported by analyst Maartunn in a CryptoQuant Quicktake post. The NVT Ratio measures the relationship between XRP’s market cap and its transaction volume in USD. A high NVT Ratio suggests the network’s value—its market cap—outweighs its transaction volume, potentially hinting at an overvaluation of the asset. Conversely, a low NVT Ratio indicates the market cap is not excessively inflated relative to the volume, suggesting a potential price rebound.
Recently, the XRP NVT Ratio has seen significant spikes, particularly on the 2nd of the month. This trend implies that the current market cap of XRP may not be fully justified by its transaction volume. Over the last week, XRP’s price has surged more than 25%, but without an accompanying increase in volume, this rally may lose momentum.
Another concern is the growing Fear Of Missing Out (FOMO) among investors. Analytics firm Santiment has noted a recent surge in key FOMO indicators, such as the Binance Funding Rate and Social Dominance. The Binance Funding Rate tracks the ratio of long to short positions on the Binance exchange, while Social Dominance measures the percentage of social media discussions focused on XRP compared to the top 100 cryptocurrencies.
Recent charts from Santiment illustrate that traders on Binance have opened a significant number of long positions during XRP’s price surge, causing the Funding Rate to become highly positive. At the same time, the Social Dominance metric shows that XRP-related discussions now account for more than 4% of cryptocurrency-related social media chatter. This heightened hype poses a risk, as historically, it has often preceded a peak in the asset’s price.
Notably, XRP’s price had reached a high of $0.74, but it has since retreated to approximately $0.67. The asset has been on an uptrend, but the question remains whether this momentum can be sustained amidst these fluctuating indicators.
