XRP Market Cap Surges Amid Concerns Over Valuation and Bearish Signals
According to Cointelegraph, XRP has experienced a remarkable surge, increasing over 600% since November and reaching a market capitalization of approximately $190 billion. This growth comes as the market evaluates the Ripple lawsuit settlement, regulatory clarity in the United States, and the momentum of exchange-traded funds (ETFs). Despite this rapid appreciation, questions arise regarding whether XRP's fundamentals have kept pace with its price.
XRP's valuation is significantly higher than its total value locked (TVL), with the XRP Ledger (XRPL) reporting a TVL of $87.74 million as of Monday, according to DefiLlama. The decentralized exchange (DEX) volumes on XRPL were $49,621 in the last 24 hours, while app fees totaled just $1,467. This indicates that XRP's market cap is over 2,200 times its DeFi TVL and approximately 363,000 times its annualized fee revenue. For XRP enthusiasts, the current valuation reflects optimism about XRPL's future growth, driven by factors such as settlement volumes, stablecoin growth, corporate treasury allocations, and ETF inflows.
XRPL hosts $175.9 million in tokenized assets, marking a 52.25% increase in a month, led by US Treasury debt, public equities, real estate, and stablecoins, according to RWA.xyz data. This rapid growth positions XRPL among the fastest in the Real World Asset (RWA) tokenization sector, suggesting expanding use cases that could enhance future XRP demand. However, XRP remains behind Ethereum, the leading layer-1 blockchain, which boasts a market cap exceeding $516 billion, a $92.06 billion TVL, and generates $10.48 million in daily app fees. Ethereum's market cap-to-TVL ratio stands at 5.6, and its market cap-to-annualized-fee ratio is 135, significantly lower than XRPL's.
From a technical perspective, XRP's recent rally shows signs of slowing momentum. A growing bearish divergence between its price and the relative strength index (RSI) suggests weakening buying pressure, a setup historically preceding corrections. XRP could face an initial pullback toward its 20-2W exponential moving average near $2.32 by September, representing a decline of over 25% from current prices. This level is notable as it approximates XRP's realized price over the past six months, essentially the average cost basis at which existing holders acquired their tokens during that period. Despite these signals, some technical analysts remain optimistic about XRP's price potentially rising to as high as $10 in the coming months. Readers are advised to conduct their own research before making investment decisions, as every investment and trading move involves risk.
