XRP: 42% of Supply in Loss Zone Sparks Sell Pressure
On-chain analysis shows that 42% of XRP’s circulating supply is currently underwater, meaning holders bought tokens at prices above today’s levels. Such a large share in loss zones raises the risk of increased sell-offs as investors attempt to exit break-even positions, potentially amplifying market volatility. XRP has struggled to maintain recent gains amid mixed sentiment and ongoing regulatory scrutiny. Traders should watch key support levels, wallet distribution trends and volume spikes closely, as further price dips could trigger stop-loss cascades. Scaling into positions at technical support and using tight risk management may help navigate near-term downturn pressures.
Bearish
A 42% underwater supply indicates significant unrealized losses among XRP holders. Historically, when crypto assets see over 40% of supply in loss zones—as observed with Ethereum in early 2022—capitulation and accelerated sell-offs often follow. In the short term, falling prices could trigger stop-loss orders and margin calls, exacerbating downward momentum. Over the long term, recovery remains possible if positive catalysts emerge (e.g., regulatory clarity or institutional adoption), but current conditions favor cautious, defensive positioning. Traders may look to scale into new positions at proven support levels or await a relief rebound before committing larger capital.