XRP has entered one of its most compressed valuation periods in years, according to the latest on-chain data from Santiment. The market intelligence firm says wallets active on the XRP Ledger over the past 12 months are now sitting on average returns of minus 41%. That drawdown has pushed XRP’s market value to realized value ratio, or MVRV, to its lowest point since the collapse of FTX in November 2022.
MVRV is widely followed as a measure of whether holders are, on aggregate, sitting on profits or losses relative to their cost basis. When the metric falls deeply into negative territory, it typically suggests that a large portion of market participants are underwater. In XRP’s case, Santiment argues that the current reading places the asset in a historically significant undervaluation zone, one that in prior cycles has been associated with major reversals rather than the start of fresh euphoria.
Why the MVRV Reading Matters
The core thesis behind Santiment’s interpretation is straightforward: deeply negative average returns can indicate that much of the speculative excess has already been flushed out of the market. In other words, weak hands may have already sold, reducing the probability of a disorderly continuation lower compared with the potential for a relief rally.
That framing is especially notable because the current MVRV reading marks the sharpest divergence between XRP’s market value and realized value since the FTX-driven capitulation of late 2022. Santiment has pointed to that precedent as an important historical comparison. After the post-FTX washout, XRP went on to rally 63% in roughly 4.5 months. Analysts watching the token now are asking whether a similar setup could develop again and eventually carry XRP back toward the psychologically important $2 level.
That threshold matters beyond pure chart psychology. XRP last held the $2 area in January, making it both a symbolic and structural marker for the market. A return to that region would suggest not just a bounce from oversold conditions, but also a meaningful restoration of confidence after a difficult first quarter.
Price Action Has Been Weak Despite the Valuation Signal
Even with this potentially constructive on-chain backdrop, XRP’s recent market performance has remained under pressure. The asset began 2026 on a relatively strong note, but the momentum faded as the quarter progressed. By the end of the first quarter, XRP was down more than 25% overall.
The token also printed a year-to-date low of $1.22 in early February. Since then, however, bulls have managed to repeatedly defend the $1.30 area. That level is now being treated as a key support zone by market participants, and its resilience could become important if sentiment improves and traders begin to rotate back into oversold large-cap altcoins.
Still, holding support is not the same as reclaiming momentum. XRP remains stuck between a deeply negative valuation profile that may attract contrarian buyers and a price structure that still reflects caution, hesitation, and reduced appetite for immediate risk.
Exchange Demand Is Sending a More Cautious Signal
One of the more important caveats in the latest dataset is that not every on-chain indicator is pointing in the same direction. Santiment noted that exchange net position change has dropped sharply, falling from 117 million XRP in late March to 57 million XRP by April 5. That decline suggests that buyer demand on centralized exchanges may be fading, at least temporarily.
For traders, that matters because oversold conditions alone do not guarantee a rebound. A market can stay cheap for an extended period if demand fails to return. In XRP’s case, the weakening exchange flow data implies that while valuation may be attractive on a historical basis, the immediate catalyst for a breakout has yet to fully emerge.
This distinction is central to the current debate. Longer-term investors may view the deeply negative MVRV reading as a sign that downside risk has become more limited relative to upside potential. Shorter-term traders, however, may be less willing to step in aggressively until exchange activity and spot demand begin to confirm a shift in momentum.
“Blood in the Streets” and the Contrarian Setup
Santiment reinforced its stance in a post on X, arguing that extreme negative MVRV conditions have often appeared before major trend reversals. The firm framed crypto as a zero-sum trading environment in which significantly negative average returns can indicate that buying or adding to positions carries lower-than-average risk compared with more euphoric periods.
The reasoning is rooted in market psychology. When the market enters what Santiment described as a “blood in the streets” phase, the most emotional selling may already be behind it. Traders who bought near local highs and could not tolerate drawdowns are often forced out first, leaving a holder base that is more patient and less likely to panic on incremental weakness.
That does not eliminate downside risk, but it can shift the balance of probabilities. In such environments, relief rallies can become more likely because there are simply fewer weak hands left to sell into strength. If demand returns even modestly, a heavily oversold market can react sharply.
Can XRP Really Reclaim $2?
The answer depends on which timeframe an investor cares about. In the short run, XRP still faces headwinds from soft exchange demand and a market structure that has not yet clearly reversed. The token may continue to trade defensively unless new buying interest appears and lifts it away from the $1.30 support region with conviction.
Over a medium-term horizon, however, the picture looks more nuanced. The combination of a 41% average loss for active wallets and the lowest MVRV since the FTX crash is not a common reading. Historically, those conditions have aligned more closely with capitulation than with complacency. For contrarian investors, that makes XRP look less like a crowded trade and more like an asset entering the type of stress zone that can precede recoveries.
Whether that recovery is strong enough to carry the token back to $2 remains uncertain. What the latest Santiment data does show clearly is that XRP is trading in an area of deep pessimism, where the market has already priced in substantial pain. If history repeats, that kind of setup can become fertile ground for a sizable relief rally. If demand continues to weaken, though, the path higher could take longer than bullish investors hope.
For now, XRP sits at a crossroads between oversold opportunity and short-term caution. Santiment’s data has strengthened the undervaluation argument, but the next decisive move will likely depend on whether buyers return in force or remain on the sidelines.