Ripple's XRP In Trouble? Holders Under Pressure as Profit Supply Falls to July 2024 Levels

The price of XRP is facing mounting pressure as the proportion of tokens in profit has fallen to 43.4%, a level last seen in July 2024. On-chain analytics indicate that when this supply drops below 50%, it often marks a shift from bullish to bearish sentiment, historically leading to sharp price declines. The current situation suggests growing capitulation among investors who accumulated XRP above $2.

Exchange reserves are also growing, with more holders moving tokens to exchanges for selling, increasing available supply and reducing short-term price support. Institutional and retail demand remains muted, with zero flows recorded for US-listed XRP ETFs, signaling weak investor conviction.

XRP's price has consolidated around $1.31, with some relief from large holder outflows from major exchanges reducing immediate sell pressure. Despite this, the broader crypto market remains uncertain, with XRP trading below key technical levels and in a descending trendline.

What Drives the Selling Pressure on XRP?

The sustained decline in XRP's supply in profit reflects prolonged bearish sentiment. Investors who bought above $2 have been selling at a loss, with daily outflows ranging between $20M and $110M since November 2025. This selling has persisted as XRP's price dropped from its mid-2025 all-time high. The MVRV ratio is currently at its lowest since the FTX crash, indicating widespread losses and a low-risk environment for buyers.

Historical patterns suggest that when supply in profit drops below 50%, it often precedes market stabilization. However, XRP is currently in a bearish phase, with over 50% of the circulating supply in loss territory. This trend may indicate a deeper capitulation period, similar to past corrections in the crypto market.

How Might Legislative Developments Affect XRP's Outlook?

Regulatory clarity remains a critical factor for XRP's future. The Senate Banking Committee has scheduled a markup for the CLARITY Act by late April, with potential passage expected by May. If passed, the bill would establish XRP as a digital commodity under CFTC jurisdiction, which could unlock significant ETF inflows and boost price projections.

Conversely, a delay could increase the risk of XRP falling below $1.20, especially if Bitcoin also experiences a downturn. The current odds for the bill's passage in 2026 stand at around 63–69%, highlighting the uncertainty surrounding legislative outcomes.

Despite recent regulatory wins, such as the SEC/CFTC commodity classification, institutional adoption is still limited due to legislative uncertainty. Large institutions are waiting for confirmation of XRP's commodity status before committing to large-scale investments. If the CLARITY Act fails to pass, XRP may remain underperforming as bearish sentiment continues.

What Are the Broader Market Implications for XRP?

XRP is currently underperforming compared to Bitcoin and Ethereum, with institutional outflows and low ETF activity limiting its recovery potential. However, XRP still outperformed both Bitcoin and Ethereum in recent fund flows, with institutional investors pouring $119.6 million into the token in the past week. This suggests some renewed interest, particularly through ETF offerings, if market conditions stabilize.

On the other hand, market attention is shifting toward alternative projects like Pepeto, which has raised over $8 million in its presale and is attracting capital from whales. Pepeto is led by the co-founder of the original Pepe coin and has a confirmed Binance listing in the works. Analysts project 100x returns for Pepeto once it lists, making it an appealing alternative for investors who find XRP's potential returns limited.

XRP's price action and institutional interest may depend on broader market movements, including Bitcoin's performance and macroeconomic developments. For now, the market appears to be in a state of consolidation, with the price trading around $1.34 and key resistance levels at $1.40.