41% Average Losses Hit XRP Wallets: Opportunity or Warning?

According to Santiment, active XRP wallets are currently underwater as a key profitability metric drops to lows last seen in 2022.

Santiment noted that XRP’s long-term average returns have dropped to lows last seen in 2022. It was observed that average wallets that have been active on XRP Ledger over the past year are down an average of -41% on their investments.

The XRP 365 day MVRV metric is currently at -41%, which marks an “extreme opportunity zone.” Santiment noted that this is the lowest MVRV (Mean Value to Realized Value) for XRP traders since the FTX crash in November 2022.

In December 2022, when XRP MVRV hovered near this low, the price jumped 63% in the following four and a half months.

Santiment explained that given that cryptocurrencies are zero-sum trading games, a significantly negative average return (which is not just a price drop but actual trader returns) might imply that there is much lower risk than average in buying or adding to positions. This is due to the fact that competing traders are already in severe “blood in the streets” territory.

In the coming days, the 30-day (short-term) and 365-day (long-term) MVRV for XRP will be watched to decide what comes next.

XRP price

At the time of writing, XRP was trading in red, as cryptocurrencies were caught up in broader market volatility.

XRP fell 2.27% in the last 24 hours and was trading at $1.31 at press time and is entering its second day of dropping following Sunday’s rise. XRP’s price, though, has been stuck in a narrow band, oscillating between $1.28 and $1.36, ever since March 28. The market has been stuck in a tug-of-war between bulls and bears, with neither side able to claim victory.

Across the board, the mood is generally pessimistic for major cryptocurrencies in the short to medium term, with the market currently adopting a wait-and-see approach.

A bullish scenario for cryptocurrencies might require some key developments. The U.S. Clarity Act, anticipated to pass in late April, is a significant one. Institutional investors are particularly focused on this as a potential regulatory breakthrough.