Ripple’s XRP, one of the most widely traded cryptocurrencies, is currently facing a tough period, with bearish signals and concerns of a potential 50% correction. After a strong start to the year, the asset’s price has plunged, raising alarms among investors and traders. Despite this, institutional investors continue to hold a long-term bullish outlook, bolstered by favorable regulatory trends in the United States and globally.

XRP’s recent price action has been unsettling. After peaking at $3.40 earlier this year, the asset experienced a sharp 35% drop, trading as low as $2.10. This decline has drawn the attention of analysts, particularly when considering the on-chain data, which indicates a shift in sentiment. The Net Unrealized Profit/Loss (NUPL) ratio, a key metric for tracking the paper profit or loss of an asset, has taken a downturn. This is often seen as a sign of weakening investor sentiment and increased selling pressure.

Historically, similar patterns in XRP’s price have led to significant corrections. In 2018, for example, XRP reached over $3 before plummeting more than 90%, dropping to $0.30. This was closely linked to the bearish NUPL reading, which indicated that many holders were in a loss position and were more likely to sell. A similar situation occurred in 2021 after a bull run, where XRP hit a high of $1.90 before sliding down to around $0.50, driven in part by ongoing regulatory hurdles from the U.S. Securities and Exchange Commission (SEC).

Currently, XRP’s NUPL has fallen into the “denial” zone, suggesting that many investors are in denial about the ongoing bearish trend. For many traders, if the price falls below $2, it could trigger further sell-offs and build a resistance that may hold back the start of a potential altcoin season. A continued decline could see XRP testing lower levels, exacerbating the ongoing bearish trend. If this occurs, the risk of a 50% correction would become more pronounced, which would further damage market sentiment.

Despite these bearish signals, not all hope is lost for XRP holders. Institutional investors are still backing the asset, with many viewing the regulatory developments in the U.S. as a positive sign for the future of cryptocurrencies, including XRP. The creation of a new crypto task force and signs of growing regulatory clarity have helped reignite investor confidence. Additionally, the approval of spot Bitcoin ETFs and growing institutional interest in crypto could help reverse the current downtrend for XRP and other altcoins.

According to crypto analyst BitGuru, there are signs of a potential reversal for XRP. The cryptocurrency has found strong support near the $2.10 level, with buyers gradually regaining control. If the buying momentum continues to build, XRP could break above the $2.22 resistance level, setting the stage for a potential rally. This would signal a shift toward a more bullish trend, helping XRP recover from its current slump and position itself for growth as the broader market regains momentum.

The broader market environment also plays a role in XRP’s future. The last quarter saw institutional outflows, driven by whale hedging losses, which contributed to a broader downturn across cryptocurrencies. However, there is renewed optimism as the market looks ahead to the approval of altcoin ETFs and a potential shift in market sentiment. For XRP, increased institutional volumes and growing regulatory clarity could lead to a price reversal, bringing the asset back into the bullish territory.

In conclusion, XRP’s price remains under pressure, with bearish trends and on-chain metrics indicating the risk of a 50% correction. However, institutional backing and evolving regulatory developments provide hope for a potential reversal. As the market braces for the next quarter, XRP holders will be hoping that the asset can overcome these bearish pressures and continue its path toward long-term growth.