XRP ‘structurally fragile’ as 41.5% of supply at a loss
News Summary
Analysts suggest XRP could face further downside if it fails to secure a meaningful recovery soon, with 41.5% of XRP holders currently underwater. Crypto analytics firm Glassnode indicated that the “XRP supply in profit” has reached its lowest levels since November 2024, signaling a top-heavy and structurally fragile market dominated by late buyers. Tony Sycamore, a market analyst at IG Australia, noted that many XRP holders likely bought when the price was above $3.00, well above the current ~$2.16 level. He believes the over 40% sell-off from the July high of $3.66 has caught both long-term holders and newer entrants off guard. This widespread unrealized loss is now weighing on sentiment and raises the risk of further downside, as stop-losses and forced sales could increase selling pressure. Sycamore stated that a decisive rebound back above $2.70 is required for recovery. Despite this, holders are hoping a wave of spot-XRP exchange-traded funds (ETFs) expected to hit the market this week will help return bullish momentum. Following the successful launch of the first spot-XRP ETF by Canary Capital on Thursday, four more ETFs from Franklin Templeton, Bitwise, 21Shares, and CoinShares are days away. However, XRP's price remains at $2.14 at the time of writing, down over 40% from its all-time high of $3.65 on July 18, showing no immediate resurgence.
Background
XRP is a cryptocurrency developed and supported by Ripple Labs, designed to facilitate fast, low-cost cross-border payments. Its price history has been volatile, reaching an all-time high of $3.65 on July 18, 2025, but was around $0.53 in November 2024. The launch of cryptocurrency ETFs, such as the spot Bitcoin ETFs earlier in 2025, has generally been seen as a catalyst for institutional capital inflow and market legitimization. However, XRP has also faced a prolonged lawsuit from the U.S. Securities and Exchange Commission (SEC), which has introduced uncertainty into its market performance and investor sentiment. Despite the current listing of new spot XRP ETFs, their immediate impact on its price has yet to materialize.
In-Depth AI Insights
Why has the launch of spot XRP ETFs failed to immediately boost prices, and what deeper market dynamics does this reveal? - The market may be following a classic “buy the rumor, sell the news” pattern. The news of ETF approvals may have been priced in over time, and without new catalysts post-launch, prices have stagnated. - XRP’s structural fragility, with a significant portion of late buyers underwater, means any price increase is likely to trigger profit-taking or stop-loss selling, limiting short-term upside from ETFs. - Institutional capital inflow may take time. Unlike retail investors' rapid responses, institutional due diligence and allocation decisions for crypto assets are typically more cautious and slower, not immediately reflected in price. With 41.5% of XRP supply at a loss for existing holders, what are the strategic implications for its long-term investment prospects? - This “top-heavy” market structure suggests that any significant future price appreciation will face immense selling pressure. A large cohort of losing holders may use rallies to cut losses, thus capping recovery momentum. - This could lead to XRP underperforming other crypto assets in the near term, as internal selling pressure persists. Investors must factor this structural headwind into their risk assessments when considering XRP. - Potential strategic shift: If prices remain stagnant for an extended period, it might compel some “diamond hands” to rotate into other assets with clearer growth narratives and healthier holder distributions. How might the cryptocurrency regulatory environment under President Donald J. Trump influence XRP's long-term trajectory and investor confidence? - The Trump administration's stance on cryptocurrencies could be pragmatic and pro-business, especially concerning fostering U.S. technological innovation and financial leadership. While XRP has previously been plagued by SEC litigation, a future regulatory framework might offer more clarity, reducing uncertainty. - Increased regulatory clarity, whether through new legislation or clearer guidelines, could attract more mainstream institutions into the crypto market, providing a long-term tailwind for major crypto assets like XRP. - However, if the regulatory environment becomes overly permissive, it could also raise concerns about regulatory arbitrage and money laundering risks, potentially causing short-term volatility. Investors need to monitor specific policy details, not just macro stances.