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XRP has seen a significant increase in on-chain activity, which has led to a recent surge in popularity.
Analysts and investors have expressed interest in this XRP Ledger, Ripple’s digital payment platform, due to increased transaction throughput.
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CryptoQuant recently noted an increase in the NVT (network value to transactions) ratio of XRP in a post on X (formerly Twitter), meaning on-chain activity is increasing. An increasing NVT ratio may indicate that the XRP network is more active than its current market valuation.
Market watchers monitor the value and activity of the altcoin, which has recently been showing a variety of signals. Despite increased network usage, XRP price still faces hurdles, with critical resistance levels imminent.
XRPL: NVT Ratio Rise
“Given that the NVT ratio is a calculation between market cap (stable around $51.1 billion) and on-chain transaction volume, this rise reflects higher transaction volume.” – By @JA_Maartun
Read more 👇https://t.co/11LKvfGjDQ pic.twitter.com/1tK1M95cKv
— CryptoQuant.com (@cryptoquant_com) November 13, 2024
What is the reason for the increase in the NVT percentage?
The measure of the “value” of network activity is Rate not availablewhich is calculated by dividing the market capitalization by the volume of cross-chain transactions. On November 2, the NVT ratio for XRP saw a sharp rise, reaching 1,162 in a relatively short period of time.
This increase was primarily due to increased on-chain activity, which resulted in the network processing $44 million in daily transaction traffic, Cryptoquant data shows.
So, what does this mean? A high NVT ratio usually indicates that the market capitalization has not kept pace with increased activity in the network, even though the network is in use. In terms of XRP, this means that the number of transactions is higher, perhaps for money transfers or other purposes.
However, this increase in activity has not yet translated into an increase in the price of the token. In fact, despite the spike in activity, XRP’s market capitalization has remained relatively flat, near $51 billion.
XRP: Focus on resistance at $0.75
While this is happening, XRP market experts are looking at how the price of the coin will change. For almost a year now, $0.75 has been strong resistance. Well-known cryptocurrency expert, Egrag Crypto, also saw this level as a major hurdle for the token.
#XRP At 0.75°C – MAJOR LEVEL!
Now I’m tired of my talk about 0.75 cents being a big deal! Let’s look at the bigger picture 📊:
On the monthly chart, three wicks have formed, indicating significant selling pressure. Here’s when we saw it:
A) November 2023
b) March 2024
c)… pic.twitter.com/7X0p3Msu9E— Egrag Crypto (@egragcrypto) November 13, 2024
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Igrag notes that if XRP can break above $0.75, it may seek subsequent targets at $0.85 and even $1.12, which could lead to a rally. However, this was no small feat, as XRP’s recent efforts to cross this threshold in November 2023, March 2024 and this month were met with significant selling pressure.
However, traders remain optimistic that increasing network activity and support levels can provide XRP with the necessary support, despite these setbacks.
December gathering
December 2024 is likely to be a transformative month for XRP. Many analysts believe that if XRP closes above $0.60 on a weekly basis, it could create a “nudge line,” which could lead to further price gains through the end of the year.
Featured image from Yahoo Finance, chart from TradingView
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