Ripple’s XRP Rally Triggers Record Profit-Taking as Plans for Bitwise XRP ETF Investment Surface.

XRP Rally Spurs $1.5B Profit-Taking as MVRV Ratio Flags Overvaluation Risks

Long-term XRP holders locked in over $1.5 billion in profits last week, capitalizing on the token’s surge to a three-year high. This marks the highest level of profit-taking since April 2021, according to data. While not necessarily indicative of shifting long-term sentiment, such large-scale profit realization often precedes a market correction.

The Market Value to Realized Value (MVRV) ratio—a measure of market valuation against aggregate cost basis—jumped to 217% on Tuesday, per FXStreet and Santiment data. This suggests XRP is significantly overvalued in the short term, which could dampen its rally. Historically, an elevated MVRV ratio has been a precursor to price pullbacks as markets adjust.

Catalysts Behind XRP’s Rally

XRP recently reached a local high of $1.60 before retreating to $1.30, maintaining a 31% weekly gain. The token has more than doubled in value over two weeks, fueled by several bullish factors. These include regulatory clarity for Ripple Labs, the launch of money market funds on the XRP Ledger, and positive technical trends.

Additionally, Ripple Labs revealed plans to invest in the rebranded Bitwise Physical XRP ETP, formerly known as the ETC Group Physical XRP. This announcement drove XRP’s price up by 10% midweek.

Now trading under the GXRP ticker on Germany’s Deutsche Börse XETRA, the ETP is 100% physically backed, offering European investors direct exposure to XRP.

“With the U.S. regulatory environment for crypto finally becoming more clear, global demand for crypto-backed investment products is accelerating,” said Brad Garlinghouse, Ripple Labs’ CEO. “This momentum is driving interest in offerings like the Bitwise Physical XRP ETP.”

Market Dynamics and Risks

Despite XRP’s impressive performance, the combination of high profit-taking and the elevated MVRV ratio points to potential overextension. Such conditions often lead to a price correction as the market consolidates.

While the token’s fundamental outlook remains strong, cautious investors may want to monitor technical indicators and broader market trends as XRP navigates this critical phase.