XRP wallets in profit now account for a significant majority, a milestone that has historically preceded dramatic market corrections. Analysts are watching closely as over 94% of XRP holders currently sit on gains, fueling concerns that a selloff may be imminent. However, several bullish indicators suggest that this time, the outcome might diverge from previous cycles.

Historical Patterns Signal Caution Amid 94% Profitability

According to recent data from Glassnode, nearly 94% of XRP-held wallets are currently in a profitable position, with XRP trading just above $3, nearing its all-time high. Market analysts warn that such high profitability has in the past served as a precursor to mass selloffs, dragging down prices rapidly.

Crypto analyst Winny likened the current market momentum to ascending a mountain—the higher one climbs, the thinner the air gets. In this analogy, rapid growth becomes harder to sustain. He highlighted that XRP recently touched $3.11, marking a steep 500% rise from $0.40 within a year. With massive unrealized gains, investors might feel the urge to lock in profits.

This pattern is not without precedent. In January 2018, profitability exceeded 90% as XRP spiked to $3.30, only to plunge by 95% soon after. A similar event unfolded in April 2021 when XRP hit $1.95, again with over 90% wallet profit metrics, before a staggering 85% drop. With the current profit level even higher at 94%, caution is understandable. Winny underlined this sentiment by stating, “someone eventually sells” when most portfolios look green.

Most XRP wallets are now in the black, raising expectations of profit-taking behavior. | Source: Glassnode

Why Current Market Conditions May Defy History

Despite historical precedence, Winny expressed optimism that this market cycle may behave differently due to unique bullish fundamentals. A key factor is the surge in large-scale XRP holding. Wallets containing over one million XRP have reached record highs, signaling increased activity among whales and institutional investors.

Further strengthening the case is a dramatic rise in network engagement. Active addresses have surged to 225,000 per day—the highest level seen in three years. Such growth in user participation often serves as a healthy indicator for long-term project vitality and price resilience.

Technically, XRP is currently consolidating within a triangle pattern near $3.05. Winny stated that a dip below this level could push XRP down to $2.40. On the flip side, a rally above the pattern might trigger a price breakout toward $6 or more, according to Elliott Wave analysis. If these bullish metrics continue to hold, profit-taking might be mitigated by strong underlying support.

Risk Scenarios: What Analysts Predict for a Downturn

Not all experts share the same optimism. Market tracker EGRAG Crypto recently outlined potential bearish outcomes, suggesting that XRP could still drop substantially—but only after reaching new highs first.

EGRAG presented two critical scenarios. If XRP hits $9, a correction of around 85% could bring it back down to $1.30. In a more aggressive projection, if the token climbs to $27, a chilling 97% retracement could send it back to $0.80—resembling the scale of declines seen in earlier cycles.

Related: XRP Price: $12M Max Pain for Bears

While these potential corrections might sound severe, they also underscore the upside possibilities prior to any downturn. Analysts agree that although risk remains, sustained whale activity and user engagement could cushion XRP from historical lows seen in past cycles.