XRP: Why does this historically low profit level worry analysts?

Behind the apparent rise in XRP, technical signals are turning red. While Ripple's crypto displays a sustained price, on-chain data betrays a worrying fragility: a large proportion of recent investors find themselves in losses, exposing the market to potentially explosive selling pressure.

A majority of investors in losses

While the price did not explode after the ETF's launch, only 58.5% of the circulating supply of XRP is currently in profit according to the latest data released by Glassnode, marking a low not seen since November 2024.

At that time, the crypto was trading around $0.53, a far cry from the current $2.15. This paradox reveals an atypical situation. Despite a price almost four times higher, 41.5% of XRP in circulation (around 26.5 billion tokens) are held at a loss.

This unbalanced distribution reveals a critical structural problem, in a market where the majority of buyers arrived late, often during rally phases.

This phenomenon reflects the presence of a market “unbalanced upwards”dominated by investors who bought at too high levels. Thus, the latter, now in latent loss, are particularly vulnerable to falling prices. In addition, this imbalance increases the risks of massive sales, especially in panic phases. The following allow us to better understand the current fragility of XRP:

• A large part of the supply is in loss despite a high price: 41.5% of the tokens in circulation, or around 26.5 billion XRP;

• Very exposed recent buyers: those who entered after the ETF announcement or during the last bullish impulse are today the most affected;

• Short-term speculative dynamics: the previous rally was fueled by opportunistic flows, not fundamental signals or sustained adoption;

• An increased risk of capitulation: historically, such a concentration of losses favors sudden, cascading liquidation phases if the downward trend becomes more pronounced.

At this point, the XRP market no longer rests on solid foundations, but on an unstable structure, where the slightest uncertainty can trigger a chain reaction. The growing weight of losing holders could become a determining factor in the short-term evolution of the price.

Fragile technical signals and increased macroeconomic pressure

In parallel with this internal pressure in the XRP market, current technical signals confirm a bearish dynamic which is taking hold.

XRP has been moving in a clear negative trend since early October, as the crypto is now trading below its 50, 100 and 200 day moving averages. Worse still, these curves are bending downward, which is generally an indicator of deteriorating momentum.

The chart also shows that each rebound attempt since September has failed to cross the resistance zone of $2.50 to $2.60. This pattern argues in favor of increasing bullish weakness, reinforced by sales volumes that explode during corrections.

Added to this is a macroeconomic context that is not very favorable to risky assets like XRP. Indeed, global markets are adjusting to increased rate volatility, ongoing geopolitical tensions and a global withdrawal of dollar liquidity. In other words, institutional investors are reducing their exposure to cryptos in an environment perceived as uncertain, even hostile.

The combination of these factors creates a slippery slope. If XRP were to break its current support around $2.15, the next pocket of liquidity lies between $1.70 and $1.80, a level that buyers had aggressively defended earlier in the year.

Despite growing institutional enthusiasm, the price of XRP remains trapped in a fragile dynamic, between massive sales and losing buyers. This imbalance creates uncertainty about the market's ability to return to a stable trajectory in the weeks to come.