XRP Rally Slows Amid Overvaluation Signs

Ripple’s XRP has recently experienced a strong rally but now shows signs of slowing momentum. On-chain data and technical indicators suggest the token may have reached a temporary peak. The Network Value to Transaction (NVT) ratio, a measure of whether market cap growth exceeds transaction activity, has risen sharply. This increase indicates potential overvaluation as market activity fails to keep up with price gains. The Money Flow Index (MFI), which tracks buying and selling pressure, also shows XRP is overbought, with recent declines reflecting reduced demand.

Lower trading volume further supports this trend, hinting that bullish momentum is weakening. Bears might use this opportunity to push XRP toward key support levels, with the possibility of testing lower price ranges. While these signs point to short-term challenges, there is still potential for recovery if buying pressure strengthens. Should demand increase and the MFI stabilize, XRP could aim for new yearly highs.

Investors should remain cautious about expecting immediate gains as indicators favor consolidation or a pullback. Monitoring transaction volume, market cap trends, and technical levels will be crucial in predicting the token’s next move. XRP’s long-term outlook remains optimistic, but near-term conditions suggest a phase of market adjustment. The next few days will likely reveal whether XRP resumes its ascent or continues to retrace.