Is XRP severely overvalued? Its market capitalization is 2,200 times its TVL, and a bearish divergence could trigger a 25% correction. Ripple (XRP) has surged over 600% since last November, with its market capitalization skyrocketing to $190 billion, nearly 40% of Ethereum's market cap. However, on-chain data shows that the ratio of XRP's market cap to its total locked value (TVL) is as high as 2,200 times, far exceeding the levels of mainstream public chains. Technically, the bearish RSI divergence signal is intensifying, suggesting that the price may retreat to $2.32. On-chain data reveals valuation bubble risks (Source: DefiLlama). According to DefiLlama data, the TVL of XRP Ledger (XRPL) is only $87.74 million, while the 24-hour trading volume of decentralized exchanges (DEX) is just $49,621, and application fee revenue is only $1,467. Market cap/TVL ratio: 2,200 times (Ethereum only 5.6 times). Market cap/annual fee ratio: about 363,000 times (Ethereum only 135 times). This extreme gap leads some analysts to claim that XRP's current price may have severely deviated from its fundamentals. Bullish Argument: Betting on XRPL's future growth. Despite the current limited on-chain activity, bulls believe that XRP's valuation reflects confidence in XRPL's future growth, including: growth in settlement volume and stablecoin issuance, corporate capital allocation, and ETF inflows. RWA (real-world asset) tokenization scale expansion. According to RWA XYZ data, the total amount of tokenized assets on XRPL reached $175.9 million, growing 52.25% in one month, with U.S. Treasury bonds accounting for $120.6 million, ranking high in RWA growth. Comparison with Ethereum as of August 12: Ethereum market cap: $516 billion, Ethereum TVL: $92.06 billion, daily fee income: $10.48 million, market cap/TVL ratio: 5.6, market cap/annual fee ratio: 135. In contrast, XRP's on-chain activity and income scale are far less than Ethereum's, yet its market cap is close to 40%, which further intensifies the 'overvaluation' controversy. Technical Analysis: Bearish divergence could trigger a 25% correction (Source: Glassnode). Recently, XRP's price has risen, but the RSI indicator has continued to decline, forming a bearish divergence, indicating weakened buying momentum. Potential support level: $2.32 (near 20-2W EMA). Estimated drop: over 25% from the current price. Historical reference: In the 2017-2018 cycle, a similar divergence occurred, and XRP experienced a significant correction. Moreover, $2.32 is close to XRP's realized price over the past six months, suggesting that this price level may become a core area for the Bull vs Bear Battle. Market Outlook: Divergence intensifies. Bearish side: overvaluation, insufficient on-chain activity, technical divergence → expectation of short-term correction. Bullish side: RWA growth, ETF potential, corporate adoption → expectation of medium to long-term upward space, even challenging $10. Conclusion: There is a huge gap between XRP's current market cap and its on-chain fundamentals, and technical signals also indicate that short-term correction risks are accumulating. For investors, the key lies in determining whether XRPL's actual applications can quickly catch up with its valuation in the coming quarters; otherwise, the current price may be difficult to sustain.