XRP Rally Sparks Record Profit-Taking as Ripple Labs Prepares to Invest in Bitwise XRP ETF
The recent surge in XRP prices has led to record profit-taking among long-term holders, with over $1.5 billion in profits realized last week. This marks the highest profit realization since April 2021. It’s important to note that profit-taking after rallies is a common investor behavior and doesn’t necessarily signal a change in long-term sentiment for any token.
The Market Value to Realized Value (MVRV) ratio jumped to 217% on Tuesday, indicating overbought market activity and potential overvaluation. This ratio compares the total value of all coins in circulation with the total value of all coins based on the price at which they were last moved on the blockchain. This suggests that XRP’s current market valuation is significantly higher than its average purchase price, hinting at a short-term overvaluation that could dampen a rapid rally higher.
Despite these indicators, XRP prices have seen a recent surge, hitting a local high of $1.60 last week before retracing to around $1.30. The token is still up 31% over the past week and has more than doubled in value over the past two weeks. Positive catalysts such as the resolution of regulatory issues for Ripple Labs, the launch of money market funds on XRP Ledger, and bullish technical price analysis have contributed to this upward momentum.
In a related development, Ripple has announced plans to invest in the newly rebranded Bitwise Physical XRP ETP. This investment comes as global demand for exposure to the crypto asset class continues to grow, fueled by increased interest in crypto-backed investment offerings. The ETP, now trading under the GXRP ticker on Germany’s Deutsche Börse XETRA, allows European investors to gain exposure to XRP through a 100% physically backed product.
Overall, the combination of high profit-taking, an overbought market, and Ripple’s investment in the XRP ETP could lead to a market correction in the near future. It’s always important to stay informed about market trends and be prepared for potential fluctuations in prices.
