XRP has been experiencing a tumultuous month, dropping 41% year-to-date. However, on-chain data suggests that the token may be gearing up for a bullish run.
The Estimated Leverage Ratio (ELR) of the XRP Ledger is declining, mirroring the conditions that led to its 790% surge in 2024. The ELR has dropped to around 0.05, indicating a massive flush of leveraged positions and potentially setting up for a price rally.
According to CryptoQuant data, XRP's Open Interest over the past year has decreased by roughly 78%, marking an outflow of leveraged capital worth approximately $8.55 billion from the market.
The trend is also being influenced by whales, with on-chain data showing that these large investors are dominating the spot average order size for XRP. Furthermore, exchange reserve data indicates a fall in reserves, with around $57 million flowing out of exchange balances into private wallets over the past month.
Additionally, the Network Value to Transactions (NVT) ratio is pointing towards undervaluation, with a reading of 312.8 implying minimal network activity and potentially oversold conditions.