TL;DR:
- 42% of XRP supply is underwater, leaving new buyers vulnerable amid sideways trading.
- Whale selling and high supply turnover expose holders to potential losses and $3.9M in recent liquidations.
- David Portnoy’s $500K XRP buy had minimal effect; XRP maintains mindshare but remains risky with slow XRPL adoption.
Ripple’s XRP faces a challenging period as 42% of its supply is currently underwater, highlighting risks for new buyers. The cryptocurrency saw a rapid shift from October, when over 90% of holders were in profit, to a scenario where only 58% enjoy unrealized gains. Recent sideways trading brought XRP down to $2.19, leaving retail sentiment subdued while investors reassess the market dynamics.
Whale Activity and Market Pressure
Whale selling has heavily influenced XRP’s supply turnover, as older holders shed positions during bullish periods. This left many recent buyers exposed to losses as XRP struggled to maintain its highs. The supply dynamics resemble November 2024 levels, when XRP began a rally from $0.50 to over $1. Over the past year, the asset peaked above $3, but did not reach the anticipated $10 range, leaving the current wave of new holders in a precarious position.
Recent market corrections make XRP riskier to hold, recalling extended bear phases of previous years. Despite strong expectations for price surges above $6, the ongoing adjustment has left holders with higher exposure to losses. Open interest remains high, with more traders attempting long positions, but $3.9M in liquidations over the past day underscores the persistent risk.
Notable investor moves have had limited effect, as demonstrated by David Portnoy’s $500K XRP purchase. Part of a broader $2M crypto allocation, this purchase was insufficient to spark significant market movement or social media excitement. Nonetheless, XRP maintains strong mindshare through early holders and influencers, expanding its visibility by 12% to 1.2% of total mindshare, surpassing other active assets despite slow adoption of the XRPL and only $73M in value locked.
XRP’s current situation underscores a high-risk environment for newcomers, with supply pressures, whale selling, and market corrections converging to challenge investor confidence. The cryptocurrency’s legacy status ensures continued attention, but potential long-term holders should be cautious of extended volatility.
