Fresh on-chain data from Santiment suggests XRP has entered one of its deepest undervaluation phases in years. According to the analytics firm, wallets active on the XRP Ledger over the past 12 months are now sitting on average returns of -41%. That deterioration has driven XRP’s market value to realized value ratio, or MVRV, down to its lowest level since the FTX collapse in November 2022.
The MVRV metric is widely watched because it compares an asset’s market capitalization with the aggregate cost basis of holders. When the ratio drops sharply into negative territory, it usually signals that a large share of investors are underwater. In practical terms, Santiment’s latest reading indicates that many XRP holders are carrying sizable unrealized losses, a condition often associated with capitulation, fear, and reduced speculative appetite.
Why the MVRV Signal Matters
Santiment argues that extreme negative MVRV readings have historically coincided with zones of lower relative risk for long-term buyers. The logic is straightforward: when average holder returns are deeply negative, weak hands may already have exited the market, limiting the amount of panic selling left to occur. In that setup, even a modest return of demand can spark a relief rally.
The firm linked the current situation to the aftermath of the FTX crisis. After XRP reached a similarly depressed MVRV level in late 2022, the token went on to rally 63% over roughly 4.5 months. That historical comparison has fueled speculation that XRP could stage another recovery if market behavior follows a comparable pattern. A key reference point for traders is the $2 level, a psychological threshold XRP last traded around in January.
Still, historical analogies are not guarantees. MVRV can help identify periods of stress and potential value, but it does not define the timing of a reversal. Assets can remain undervalued for extended periods if broader market sentiment stays weak or if fresh demand fails to materialize.
Price Action Remains Fragile Despite Oversold Conditions
XRP’s market structure reflects that tension. The token entered 2026 on a constructive note, but the first quarter ultimately ended with a decline of more than 25%. Selling pressure intensified after the early-year rally faded, pushing XRP down to a year-to-date low of $1.22 in early February.
Since then, the asset has repeatedly defended the $1.30 area, turning that zone into an important near-term support level for bulls. The ability to hold above that line has prevented sentiment from deteriorating even more sharply. However, support alone does not establish a reversal. For a stronger bullish case to emerge, traders will likely want to see both sustained buying interest and a recovery in momentum rather than just repeated stabilization above local lows.
Exchange Flows Point to Softer Near-Term Demand
While the undervaluation narrative has gained traction, not every on-chain signal is supportive in the short run. Santiment highlighted a decline in exchange net position change, which fell from 117 million XRP in late March to 57 million XRP by April 5. That shift suggests buyer demand on centralized exchanges may be losing strength, at least temporarily.
Weakening exchange demand matters because it can limit the market’s ability to translate oversold conditions into a tradable rebound. In other words, an asset can look statistically cheap on-chain while still struggling to move higher if spot demand is fading. This is one reason the immediate XRP trend still appears cautious despite the attractive MVRV setup.
For market participants, the takeaway is that XRP may now be caught between two competing forces: deep undervaluation on one side and short-term demand fatigue on the other. That combination often creates volatility rather than a clean directional move.
Contrarian Setup or Premature Bottom Call?
On social platform X, Santiment reinforced its view that significantly negative MVRV readings often precede major trend reversals. The firm noted that in crypto’s zero-sum trading environment, heavily negative average returns can imply that the downside risk of initiating or adding to positions is below normal. This is especially relevant during periods the market describes as “blood in the streets,” when capitulation has already shaken out a large share of emotionally driven sellers.
For contrarian investors, XRP’s current profile may therefore look compelling. An average loss of 41% across active wallets, combined with a multiyear MVRV low, provides a textbook argument for a buy-the-capitulation strategy. The thesis is not that XRP must immediately rally, but that the reward-to-risk balance may be improving as sentiment becomes more pessimistic.
At the same time, more conservative traders may prefer confirmation. They could wait for exchange demand to stabilize, for price to reclaim higher levels, or for XRP to break out of its recent defensive posture around support. In oversold markets, the first bounce is not always the start of a durable uptrend; sometimes it is only a temporary relief move within a broader correction.
Can XRP Reclaim $2?
The question now dominating the market is whether XRP can recover enough strength to revisit $2. The historical template cited by Santiment suggests that such an outcome is possible if the current undervaluation zone marks another capitulation phase similar to late 2022. But any move back to that level would likely require more than just bearish exhaustion. It would also need renewed participation from buyers, stronger exchange flows, and a broader improvement in crypto market sentiment.
For now, the on-chain picture paints a nuanced story. XRP appears deeply oversold by one of the market’s most closely followed valuation metrics, and that tends to attract long-horizon investors looking for asymmetric setups. Yet the softer exchange data warns that the path higher may not be immediate.
In short, Santiment’s latest report does not confirm that a rebound has begun, but it does indicate that XRP has moved into a historically significant undervaluation zone. Whether that leads to a sustained recovery or merely a short-lived relief rally will depend on how quickly demand returns and whether key support levels continue to hold.