XRP: 41.5% Supply Underwater Despite Gains

What to Know:

• Over 40% of the XRP supply is currently held at a loss, indicating many investors bought above $2.15.
• This situation makes the XRP market structurally fragile, as further price drops could trigger panic selling.
• A significant portion of Bitcoin held by short-term holders is also underwater, highlighting a severe drawdown.

Recent data reveals that a substantial portion of the XRP supply is currently held at a loss, raising concerns about market stability. Specifically, 58.5% of the XRP supply is in profit, marking the lowest level since November 2024. This situation suggests that a considerable number of investors purchased XRP at prices exceeding $2.15 and are now facing unrealized losses.

The share of XRP supply in profit has fallen to 58.5%, the lowest since Nov 2024, when price was $0.53.
Today, despite trading ~4× higher ($2.15), 41.5% of supply (~26.5B XRP) sits in loss — a clear sign of a top-heavy and structurally fragile market dominated by late buyers.
📉… https://t.co/CBXPzDalxV pic.twitter.com/UpLNKV7LqD

The data indicates that approximately 41.5% of the XRP supply, or around 26.5 billion XRP, is underwater, meaning holders bought in at prices above the current level. This concentration of holders facing losses creates a potentially fragile market structure. Should prices decline further, these investors may be inclined to sell, amplifying downward pressure on XRP.

Glassnode’s analysis points to a “structurally fragile” market, driven by the fact that many investors acquired XRP near recent highs rather than during lower price points. This suggests that a significant portion of the market may be more reactive to negative price movements. The potential for panic selling among these holders could exacerbate any future price declines.

Meanwhile, the Bitcoin market is also experiencing its own challenges, with a large percentage of short-term holders currently underwater. As much as 95% of Bitcoin held by those who purchased it less than 155 days ago are facing losses. This situation underscores the severity of the current drawdown in the crypto market.

In conclusion, while XRP and Bitcoin face distinct challenges, both markets exhibit vulnerabilities due to a significant number of holders currently underwater. Investors should monitor market dynamics closely, as potential sell-offs could amplify price volatility in the near term, especially amid evolving regulatory landscapes and the anticipation of spot Bitcoin ETFs.

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

Source: Original article