XRP's (CRYPTO: XRP) on-chain sentiment shows traders are heavily underwater, even as technical indicators are beginning to show early reversal signals.

XRP Traders Are Watching This Zone

Santiment data shows the average XRP trader active over the past 30 days is now down roughly 47%, pushing the token's 30-day Market Value to Realized Value (MVRV) ratio to its lowest level since December 2020.

The analytics platform said the deeply negative MVRV reading suggests panic selling and retail capitulation may be reaching exhaustion levels.

Historically, MVRV readings tend to revert toward zero over time, making extreme negative zones important areas traders watch for potential rebounds.

Santiment noted XRP has lost more than half its value since last summer's highs, leaving many short-term holders trapped after buying during the late-2024 and early-2025 rally.

Repeated selloffs since then have pushed a large portion of traders underwater.

Traders continue monitoring several potential catalysts around XRP, including Ripple's regulatory progress in the U.S., growing speculation around spot XRP ETFs and broader adoption of Ripple's payment infrastructure.

Buy Signal Flashing

Crypto analyst Ali Martinez added to the bullish reversal narrative, noting that XRP recently flashed a TD Sequential buy signal.

According to Martinez, the setup could support a rebound toward $1.35 before the broader trend resumes.

In a X post on May 26, Martinez predicted that if XRP continues holding its parallel channel structure, the mid-range near $0.73 is a potential accumulation area for buyers.

Image: Shutterstock