XRP remains trapped in a continuous downtrend after attempting to break out but failing once again. This altcoin continues to trade below key resistance levels, reflecting decreasing support from investors.
Selling pressure has increased as sentiment weakens, raising concerns that XRP may face difficulties in making a comeback, despite multiple recovery attempts.
Nearly 50% of XRP supply is underwater.
On-chain data shows that profitability has significantly decreased, with the proportion of XRP in profit dropping to only 52% after a continuous decline over several weeks. Currently, nearly half of the circulating supply is at a loss, increasing the risk of panic selling.
The last time the profit rate was at a similar level was in November 2024. Historically, when XRP's profits fell below 50%, prolonged corrections often occurred. Although a deeper decline may not happen immediately, this pattern also indicates higher long-term downside risk.
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Macro data continues to add pressure, as the supply held by the top 1% of XRP addresses has slightly decreased. These wallets now hold 87.6% of the total supply, down from 87.7% earlier this month.
While it may seem like a minor change, this group of addresses includes whales and institutional holders. Even a slight increase in distribution from this group can impact prices, making their gradual selling a warning sign and further emphasizing concerns about XRP's recovery potential if new demand does not emerge.
XRP is trading near 1.92 USD as this article is being written, slightly below the resistance level of 1.94 USD. Prices remain constrained by a downtrend line that has persisted for over six weeks. In the current scenario, XRP is likely to consolidate between 1.85 USD and 1.94 USD in the near term.
Negative sentiment continues to expose XRP to further selling pressure. A move down to 1.85 USD is still possible as traders react to reduced profitability and whale coin distribution. However, a deeper decline seems limited unless overall market conditions worsen significantly.
Even so, there is still a chance for an upward movement if XRP can decisively break above the 1.94 USD level and surpass 2.00 USD, which would break out of the downtrend. Such movement would invalidate the negative assumptions and increase the potential for greater supply profitability. The increased profits may restore confidence and support broader recovery efforts.
