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42% of XRP holders are underwater despite the token trading near $2.
On-chain data shows increased market fragility as many bought at higher XRP price levels.
Ripple’s future outlook depends on demand, sentiment, and broader crypto-blockchain trends.
New blockchain data shows that XRP is under growing pressure despite its relatively high price. Recent reports from leading on-chain analytics confirm that only 58.5% of the circulating XRP supply is currently held at a profit. This means that about 41.5%, or roughly 26.5 billion XRP, is now underwater. These are tokens bought at higher prices than today’s value, leaving a large portion of holders sitting on unrealized losses.
This is the lowest profitability level for XRP since late November 2024, when the token traded near $0.53. Even though XRP is currently priced between $1.97 and $2.15, many recent buyers are holding at a loss as they entered at elevated price levels during earlier 2025 rallies.
Also Read: XRP Adoption Expands as More Banks Test Ripple Technology
As an important market health indicator, the share of tokens in loss shows that a large number of holders can create selling pressure. After all, many investors who have bought in at higher prices will be watching for an opportunity to get out if the market shows further weakness. This can trigger stronger price drops.
Analysts characterize the current structure of XRP as "top-heavy", meaning that a lot of holders bought in during later stages of a price rally, which also happen to be the times when optimism has been at its peak. These late-cycle buyers tend to be more sensitive to losses and thus more likely to sell during downturns. When such holders own too much supply, the market tends to become fragile, being easily pushed lower.
It is partly this slippage from earlier highs that marks the dramatic increase in XRP holdings. During the year, the asset rallied into the $3 to $3.60 range on the back of institutional excitement, healthy retail interest, and a degree of regulatory clarity following the close of the long-running SEC case.
Corrections from highs later brought the token back towards the $2 level, placing a substantial group of buyers that recently came in into negative territory. Several of these holders are now down 30–40% or more, depending on their entry price.
One of the main reasons for the present outcome is a change in the ownership pattern. Long-term holders and early whales used periods of strong price action to take profits. This selling was taken up by new, speculative buyers. The result was a holder base dominated by recent entries rather than long-term conviction holders.
This matters as long-term holders tend to hold through volatility, giving the market stability. Newer buyers, on the other hand, are more reactive and more likely to sell under pressure. As a result, the profile of owners for XRP has become more vulnerable to rapid downturns.
Major drivers included institutional developments, which accounted for most of the fresh interest throughout 2025. The rollout and approval of spot XRP exchange-traded products stirred excitement among traders and institutions alike. Regulatory clarity in the wake of the Ripple legal case settlement added to the confidence earlier in the year.
This wave of enthusiasm also enticed many investors to buy high. With better regulatory status and more institutional participation in place, on-chain data indicates a large portion of those buys are now underwater. Thus, it becomes clear that institutional buzz was not enough to construct a solid long-term support base.
Sentiment and liquidity evolution will determine what direction the asset’s future course. XRP price could stabilize near the current levels and slowly recover, helped by institutional flows or renewed market interest. In that case, some of the holders may be able to exit gradually, allowing the market to absorb the selling without a dramatic crash.
The alternative scenario is more negative. If XRP loses key support levels and broader crypto sentiment weakens, the large concentration of loss-making positions could trigger panic selling. This could lead to a sharper correction as leveraged positions are unwound and holders rush to cut losses.
Both outcomes remain possible, with the deciding factors to include global market conditions, strength of buying support, and any new regulatory or institutional developments.
These metrics do not ensure a fall in XRP price. They are indicative of increased risk and outflows. A market with more than 41% supply in loss is less stable, with greater potential for sharp moves. Strong demand may change the picture quickly, but the current structure demands caution.
On-chain data simply shows where the pressure points lie. In XRP's case, nearly half of the supply is held by people who are currently losing money. That creates conditions where fear or sudden shifts in sentiment can have an outsized impact on the price.
Also Read: XRP ETF Launch Sparks Massive Institutional Inflows
While XRP is much higher in price than its late 2024 prices, a surprising 41–42% of its supply is underwater. This is the lowest profitability reading in a year and reveals a market that has become structurally fragile. Many holders entered during hype periods and now sit on losses, making the market sensitive to further declines.
Whether XRP stabilizes or faces a deeper correction will depend on market sentiment, institutional support, and the behaviour of loss-making holders. Current data paints a picture of a market under pressure and at a crossroads, with both recovery and further decline remaining possible.
1. Why are 42% of XRP holders underwater?
As many investors bought XRP during earlier 2025 price highs, the current price drop has pushed those positions into unrealized loss.
2. What does it mean when the XRP supply is underwater?
It means a large portion of tokens were purchased at higher prices, creating potential selling pressure if the market declines further.
3. Is XRP expected to recover soon?
A recovery depends on market sentiment, buying support, institutional activity, and broader crypto trends; both recovery and further decline remain possible.
4. How does Ripple’s regulatory progress affect XRP?
Regulatory clarity has boosted confidence, but it hasn’t yet reduced the high volume of loss-making positions that still pressure the market.
5. Why is the XRP price still near $2 if many holders are at a loss?
The price reflects current trading activity, not the cost basis of holders; large numbers of recent buyers entered at much higher levels.
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