XRP Seeks to Close Its Discount Faster Than Dogecoin
The crypto market has been volatile in recent times, with some assets experiencing significant losses. Two such assets are XRP and Dogecoin, which have seen their prices decline over the past year.
According to Santiment's one-year Market Value to Realized Value (MVRV) data, holders of both XRP and Dogecoin have lost money, with the average loss for XRP holders at 11.8% and 19.3% for Dogecoin holders. However, while both assets are currently 'underwater,' Dogecoin investors are worse off.
Dogecoin has surged in recent days, climbing 12% to reach $0.10, fueled by large wallet holders or 'whales' making significant purchases. XRP gained 10.4% over the same period, bringing its price to $1.55. The question on investors' minds is which of these two cryptocurrencies will recover its losses first.
The answer largely depends on buyer behavior and whether those buyers actually possess the coins. MVRV measures a cryptocurrency's market value against its realized value, the price at which the coins were last transferred on the blockchain. When the MVRV reading is negative, it indicates that the average price at which transactions occurred in the last year was higher than the current market price.
Many traders view a significant negative MVRV as a potential buying signal. However, this theory holds true only if fresh investments come in to absorb the remaining selling pressure. If new buyers don't show up, the discount could deepen.