- The XRP MVRV-Z indicator suggests the possibility of reaching its lowest level:

XRP has experienced a general downtrend amid price volatility since reaching its all-time high of $3.66 in July. The coin hit its lowest point of the year at $1.12 on February 6 amid overselling conditions. Although an immediate rebound pushed XRP to $1.54 on the same day, opposing factors still limit its upward movement.

Meanwhile, the MVRV-Z indicator, a measure of whether XRP is overvalued or undervalued relative to its fair value, dropped into negative territory in early February, indicating that the coin may have reached its lows.

Despite the varying durations that the MVRV-Z indicator remains in negative territory, historical data shows that sustainable recovery often precedes such scenarios. For example, in July 2024, when the MVRV-Z indicator hit -0.13, XRP's price rose from $0.45 to $2.91 by December of the same year. Therefore, there is a high likelihood that the digital asset has bottomed out and is on the verge of a prolonged recovery, as the MVRV-Z indicator remains at -0.13.

XRP MVRV-Z Indicator | Source: Glassnode

Despite the potential positive outlook suggested by the MVRV-Z indicator, rising foreign exchange reserves paint a different picture that could hinder recovery. According to Glassnode data, the cumulative cross-border remittance balance increased to approximately 12.99 billion XRP on Thursday, after a slight decrease to 12.93 billion XRP on February 8.

Although this increase is relatively modest, caution is warranted, as it raises the amount of XRP available for sale in the open market. Investors are transferring their holdings to trading platforms amid market volatility, aiming to sell and reduce risk.

XRP Trading Reserves | Source: Glassnode