Market analyst Mike Faye has provided a council for XRP investors looking forward to the Bag and Securities Commission (SEC) approval for funds cited in US cash stocks (ETFs).
“I will be cautious about XRP due to the hopes of ETFs. Very often these catalysts will become the incident of “buying rumors, selling news,”” he said in one of his latest reports.
The euphoria for the possibility of Ripple cryptocurrency ETF launch is nothing new, but it intensified after the U.S. Stock Exchange and Value Commission (SEC) officially dismissed accusations against the company, ending a lawsuit launched on suspicion of selling value that has not been registered more than $1.3 billion.
As already reported by Cryptonoticia, Paul Atkins is currently evaluating proposals from the Canary capital, 21 shares, Bitwise, Grayscale, Franklin Templeton and Coinshare.
The regulatory panorama appears to have been cleared, but Faye in his paper shows clear signs of overestimation, with data being the data being On-chain They do not completely justify recent performances and could lead to revisions after ETF approval.
One sample was that XRP’s active orientation reached a historical maximum of 246,500 in March, a positive indication of network use. However, he also points out that growth in this activity will not be at the same rate as price increases.
It also explains the relationship between market value and created value (MVRV). It reached 2.3 in February. “The level that historically marked the ceiling of prices,” says Fay.
At the time of the report’s publication, the ratio was 1.7, but this is still A significant overvaluation compared to the average price obtained through circulation of cryptocurrency.
As can be seen in the graph, the last time MVRV reached that level was in 2021 (yellow line), perfectly coinciding with the peak XRP price of the previous cycle (blue line).
Faye makes it clear that he maintains his position to “hold” XRP, and from his perspective, Network usage data is extremely encouraging. But it stands out:
“The prices are much higher than anything. I understand that speculators want to buy XRP before the ETF reaches the market, but I think Ethher (ETH) won’t act as a warning signal for this type of increase caused by enthusiasm.”
Mike Fay, cryptocurrency market analyst.
In theory, the launch of the XRP ETF will increase the visibility of institutional investors’ assets, and in addition to attracting more liquidity to the Ripple ecosystem.
But, as Faye explains, this may not be the case. This is demonstrated by what happened in ETFs based on Ethereum’s native cryptocurrency, They have far lower performance compared to the same Bitcoin (BTC) financial products.
Ether Financial Instruments was released in July 2024 and has since registered money tickets for $226 million.
“The ETH fund reached the US market in 2024, and tokens have since dropped by more than 50%, partly because ETH’s basic narrative faces challenges, but the price of ETH has risen significantly in the months before ETF approval,” Fay said.
It also claims that the MVRV relationship shows it The price of the XRP is “it could have been “to reach the beak during this cycle.”
Finally, the analyst emphasized: “With a market capitalization of $130 million, XRP is valuing success on a network that may not be completed. Again, I think there is a clear positive side to it, but those bullish with XRP can wait for a better price.”
Fay believes XRP is already at its maximum in this cycle, but there are other voices who believe it is not.
Exchange Bitget analyst Jacobo Maximiliano claims Ripple Labs’ currency could reach up to $7 in 2025.
Market analyst Crypto Michael predicts XRP will reach the price of $5.80 in the short term.
In addition to the release of ETFs, Another price catalyst is the yield of USD Ripple (RLUSD)stablecoin maintains equality with the US dollar and operates on Ethereum and XRP ledger networks.
If RLUSD can be integrated in the market, it could potentially increase the volume of XRP ledger trading. This increases the demand for XRP to meet fees, creating bullish pressure on prices.
