XRP has been on a downtrend recently, falling below important support levels before showing signs of a potential bullish breakout. Despite this, the coin's overvaluation has raised doubts about the likelihood of a successful breakout.

The soaring network value-to-transaction (NVT) ratio of XRP, hitting a five-year high, indicates an overvaluation. This ratio compares a cryptocurrency's market capitalization to its transaction volume, and a sharp increase suggests that the network value is surpassing actual transaction activity. Historically, such high NVT ratios have preceded price corrections, as seen before XRP's significant price drop in January 2020.

Although XRP has surged by 22% in the past two weeks, technical indicators, like the Chaikin Money Flow (CMF), reveal concerns. The spike in CMF typically indicates money flowing into the market, but the lack of substantial buying activity supporting the price rise suggests that speculation and hype are the driving forces behind the rally.

Considering these factors, it is likely that XRP's recent price surge is a short-term anomaly rather than a sustainable upward trend. As market hype diminishes and the overheated market cools down, the altcoin might struggle to maintain its current price levels, potentially facing a correction due to overvaluation risks.

XRP's current price at $2.19 reflects a 22% increase over the past two weeks, with the possibility of breaking out from a descending channel. However, challenges lie ahead due to overvaluation and broader market indicators, indicating that the rally may not be long-lasting. In case the breakout fails, XRP's price could drop to $2.02 or even lower to $1.94, given the combination of overvaluation and weak buying momentum.

If XRP successfully sustains its breakout, establishing support levels at $2.40 and $2.56 could pave the way for further price growth, negating the bearish outlook and allowing for continued ascent.