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XRP has seen a strong bullish run recently, gaining nearly 27% over the past week and breaking through a major resistance level at $2.725. As optimism around XRP ETFs and institutional interest grows, the price now hovers just below the $2.90 mark, stirring hopes of a potential rally toward $3 and beyond.
However, on-chain data reveals an emerging shift in market dynamics. A massive inflow of XRP to exchanges and high levels of unrealized profit among holders are raising concerns about short-term selling pressure.
XRP Price Nears $2.90 After Breaking Resistance
At the time of writing, XRP is trading around $2.89, reflecting strong momentum fueled by ETF expectations and overall market sentiment. The recent breakout above $2.725 — a key resistance level based on Trend-Based Fibonacci Extension lines — marked a significant technical victory for bulls.
The next major resistance is at $2.949, a level that could determine the immediate trajectory of XRP. A clean break above this could push the token toward new highs. But a rejection at this zone may lead to a cooling-off period.
98% of XRP Holders Are in Profit — A Double-Edged Sword
On-chain data from Glassnode reveals that more than 98% of all XRP holders are currently in profit. This means that nearly the entire circulating supply was acquired at lower price levels, and investors are now sitting on unrealized gains.
While this is bullish from a macro perspective — as it indicates strong holding conviction — it also introduces short-term risks. Historically, when the vast majority of token holders are in profit, profit-taking tends to increase, especially after sharp price surges.
The “Supply in Profit” metric simply tracks the percentage of the token’s supply currently worth more than its acquisition cost. High values on this indicator often lead to increased sell-offs, which can apply downward pressure on price.
Exchange Inflows Spike: Over $1.47 Billion in XRP Transferred
Perhaps the biggest red flag comes from the sudden surge in XRP balances on centralized exchanges. According to on-chain metrics, the exchange-held XRP supply has ballooned to 3.949 billion tokens, the highest level in over four months.
This increase represents an inflow of more than 519 million XRP (worth approximately $1.47 billion) since June 23, coinciding with XRP’s sharp rally from $2.16 to $2.83.
Spikes in exchange balances often precede sell-offs. When more tokens are transferred to exchanges, they are typically made available for trading or liquidation — a clear indication that some investors are preparing to take profits.
Unless large-scale buyers or institutional participants step in to absorb this excess supply quickly, XRP could face increased downward pressure in the coming days.
Support and Resistance Levels to Watch
From a technical analysis standpoint, XRP has already flipped the $2.725 resistance level into support. If selling begins to intensify, additional support zones lie at $2.550 and $2.30.
A drop below $2.30 would be a significant development, as it would bring XRP back into the trading range it occupied from late April through early June. This would likely invalidate the current bullish structure in the short term.
Conversely, a break above the $2.949 resistance — especially if accompanied by a decrease in exchange balances — could mark the beginning of the next leg in XRP’s ongoing rally.
ETF Optimism vs. Market Caution
The current XRP price surge is largely attributed to growing anticipation surrounding a potential XRP ETF. This optimism has helped XRP outperform many altcoins over the past week. However, traders and investors should balance this enthusiasm with caution.
Profit-taking by holders, rising exchange balances, and a possible technical rejection at the $2.949 level could lead to a temporary pullback — even if the broader trend remains bullish. If XRP is to maintain upward momentum, it will need continued institutional interest and reduced selling activity from existing holders.
Conclusion: Temporary Setback or Start of Correction?
While XRP’s fundamentals and ETF-driven narrative remain strong, short-term indicators suggest caution. The high percentage of holders in profit and the sharp rise in exchange balances point to increased potential for sell pressure.
Still, unless support levels break decisively, any pullback may be viewed as a healthy correction in an otherwise strong uptrend.
As XRP flirts with the $3 psychological barrier, the next few trading sessions could be crucial. Watch for price reactions near $2.949 and monitor exchange flows for signs of large-scale accumulation or continued distribution.
