Nearly 50% of XRP Holders Are Underwater — Why Traders See This as Bullish
Crypto analyst Steph Is Crypto reports that nearly 50% of XRP’s circulating supply is now underwater, with the share of supply in profit falling to about 52% on a 7-day moving average. The drop in holder profitability occurred alongside XRP’s price decline, meaning a large portion of tokens last moved at prices above current levels. Historically, this “profitability compression” has reduced immediate selling pressure from profit-takers and preceded sharp rallies when demand returned — Steph notes a comparable setup in November 2024 that preceded a 500%+ rally. The current setup suggests downside risk is more evenly distributed and that modest inflows could have outsized price impact because fewer holders are positioned to sell at a profit. The article emphasizes this is not investment advice and urges readers to do their own research.
Bullish
The news is categorized as bullish because a nearly 50% share of XRP being underwater signals reduced overhead selling pressure and a tightened free float of profitable holders. Historically, similar profitability compressions have preceded strong rallies when demand returned — the November 2024 parallel (followed by a 500%+ rally) is cited as a structural precedent. For traders this implies: short-term — higher emotional risk during continued declines but lower likelihood of large-scale profit-taking; volatility may increase and price becomes more sensitive to flows. A modest buy-side influx could produce outsized moves. Long-term — if demand drivers (legal clarity, adoption, macro flows) re-emerge, the reduced immediate supply from profit-takers can accelerate uptrends. Risks remain: comparisons across cycles are not certain, and prolonged weak demand could prolong losses and pressure. Traders should watch inflows, exchange flows, on-chain profit metrics, and order-book liquidity to time entries and manage risk.