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Ripple’s XRP is navigating one of its most challenging phases of the year as supply dynamics shift against new buyers and market sentiment remains fragile. Following the most recent price decline, 42% of the circulating XRP supply is now in the red, putting short-term buyers under pressure and raising questions about whether confidence can return in the near term.
Data shows that XRP has undergone a significant holder rotation over the past 12 months, transferring coins from long-term whales to newer investors who accumulated during periods of optimism. Many of those newer buyers are currently holding at higher entry points, increasing the likelihood of selling during periods of volatility.
Supply in profit sees steep decline
According to CoinGecko data, only 58% of XRP holders are currently sitting on unrealized gains, down sharply from 90% in October. At the peak of optimism last month, XRP was considered one of the stronger performers among major altcoins, briefly fueling expectations that the token might be preparing for another breakout. However, the optimistic setup reversed as price momentum weakened and selling pressure grew.
XRP recently slipped to $2.19 after several weeks of sideways trading and currently remains below levels where most late buyers accumulated. The downturn has led to a visible shift in sentiment among retail traders, many of whom remain cautious following the correction.
Whales reduced exposure as retail confidence peaked
One of the biggest drivers of the recent supply imbalance was long-term whales trimming their holdings during bullish sentiment in 2025. While retail traders were optimistic and increasing positions, large early holders were steadily offloading, securing profits and reducing exposure.
That distribution phase contributed to a major turnover in supply, leaving newer buyers exposed to further downside. It is the first time since November 2024 that a similar percentage of the XRP supply has been underwater.
Last year’s conditions preceded a strong rally that took XRP from $0.50 to above $1, later leading to a climb above $3 in 2025. This year, many traders expected those gains to continue and targeted a long-anticipated move into a $6 to $10 range. However, the recent correction has pushed those expectations further out of reach for now, reinforcing caution across the market.
Leverage persists despite volatility
Data shows that derivatives traders are still heavily positioned for upside, even as XRP’s spot performance weakens. Open interest remains elevated, signalling continued demand for leveraged exposure. However, this setup has introduced higher risk, as evident from $3.9 million worth of long liquidations in the past 24 hours alone.
Analysts caution that elevated leverage without clear bullish momentum can increase downside volatility, particularly if short-term buyers continue to exit positions.
David Portnoy enters the market — but price reaction stays muted
During XRP’s price slide, a high-profile crypto investor attempted to step in. David Portnoy, widely known for his speculative trading and interest in trending tokens, disclosed that he acquired $500,000 worth of XRP as part of a broader $2 million crypto allocation that also included ETH.
However, the purchase did not meaningfully influence XRP’s price, nor did it generate significant social media momentum. Analysts note that sentiment around XRP remains muted, with large community activity insufficient to offset bearish market pressure at this stage.
XRP remains widely followed despite market fatigue
Despite the drawdown, XRP still holds a strong presence in the digital asset sector. Data from Messari shows that XRP’s mindshare has grown 12% to 1.2%, ranking ahead of several assets that currently have more development activity or larger decentralized ecosystems.
That continued visibility is largely supported by the token’s history, long-standing holder base, and active social community — often referred to as the “Ripple army.”
However, broader adoption metrics are lagging behind sentiment. The XRP Ledger (XRPL) continues to show slow growth compared to other smart-contract networks. Total value locked across the XRPL ecosystem is about $73 million, far below competing ecosystems such as Ethereum, Solana, Avalanche, and Base.
Analysts suggest that stronger network development, deeper liquidity, and more compelling real-world use cases would be required to support the next phase of value growth for XRP.
What may influence XRP next?
Key factors that could shape XRP performance over the next several weeks include:
FactorPossible outcomeSelling pressure from recent buyersExtended price consolidation or further declinesReduction in whale sellingMore stability across major price levelsDerivatives leverage and liquidationsHigher volatility in both directionsNetwork adoption and on-chain activityPotential confidence boost if sustained
For now, the market remains sensitive to volatility and short-term speculation. While historically XRP has produced strong rebounds following deep corrections, analysts note that confidence must rebuild gradually before momentum can shift firmly to the upside.
Final outlook
XRP is currently at a critical stage, with a large portion of its supply held at a loss and new buyers under increasing pressure. Continued whale distribution earlier in the cycle has made the current price structure more fragile, while elevated leverage adds to volatility risk. Retail sentiment remains subdued, and external events such as a single large buy have not been enough to reverse momentum.
The long-term outlook for XRP will depend on whether demand returns to both the asset and the XRPL ecosystem. If on-chain growth accelerates and selling pressure from new holders eases, XRP may recover more sustainably. Until then, the asset remains in a cautious zone, requiring patience from holders and discipline from traders.
