XRP at 94% Profitability: Recurring Pattern or Breakout Moment?

The XRP market in 2025 stands at a crossroads. On one hand, on-chain metrics echo the bearish patterns that preceded the 2018 and 2021 collapses: over 91% of the supply in profit, declining daily active addresses (DAAs), and whale-driven distribution. On the other, a confluence of regulatory clarity, institutional adoption, and technical strength suggests a potential breakout. This article dissects the tension between history and innovation to determine whether XRP is destined for a repeat of past failures or a new era of growth.

Historical Parallels: The Bear Case

XRP's 2018 and 2021 corrections were preceded by a familiar script. The Net Unrealized Profit/Loss (NUPL) metric entered overbought territory, signaling speculative fervor. In 2018, this coincided with a 95% price drop from its peak of $3.40; in 2021, a similar NUPL spike preceded a 90% collapse. Whale activity mirrored these trends: large holders offloaded billions of XRP during rallies, triggering cascading sell-offs. Network activity also crumbled, with DAAs plummeting from 600,000 to under 100,000 in both cycles.

Today, the same patterns are reemerging. Over 91% of XRP remains in profit, creating a “profit-taking overhang.” Whale outflows of $1.9 billion in recent months reflect a lack of confidence, while DAAs have collapsed to 33,000—a 94% drop from March 2025. The Cumulative Volume Delta (CVD) has remained negative since July 28, 2025, underscoring sustained selling pressure. These metrics suggest a high probability of further downward movement unless structural shifts occur.

Bullish Catalysts: A New Narrative

Yet 2025 is not 2018 or 2021. Three key factors differentiate the current cycle: whale accumulation, regulatory clarity, and institutional adoption.

1. Whale Accumulation and Liquidity Dynamics
   While some whales are offloading XRP, others are aggressively accumulating. Between August 7–10, 2025, whales purchased 1.2 billion XRP ($3.8 billion) during a $10 billion market selloff. This strategic accumulation—particularly into major wallets—has historically preceded medium-term recoveries. Over the past week, 440 million XRP were added to key addresses, reducing exchange reserves and thinning spot-market liquidity. This suggests a potential price floor as large holders absorb supply.

2. Regulatory Clarity and ETF Momentum
   Ripple's March 2025 SEC settlement resolved a decade-long legal battle, confirming XRP's status as a non-security in secondary markets. This unlocked institutional adoption, with four XRP ETFs now trading in U.S. and Canadian markets. The ProShares Ultra XRP ETF (UXRP) and Purpose XRP ETF (XRPP) have surged 50% in one month, with Bloomberg estimating an 85% chance of spot ETF approval by year-end. These products provide regulated access to XRP, attracting both retail and institutional capital.

3. Technical Strength and Market Fundamentals
   XRP's technical indicators suggest a potential reversal. The MVRV golden cross—where the Market Value to Realized Value ratio crosses above its 200-day moving average—has historically preceded 50–100% price rallies. The NVT (Network Value to Transactions) ratio has dropped 46.1%, aligning XRP's market value with on-chain utility. Meanwhile, the RSI is in oversold territory (35.8), and a bullish divergence between price and momentum metrics hints at exhausted short-term sellers.

The Breakout Scenario: Can XRP Defy History?

The critical question is whether current bullish factors outweigh historical bearish patterns. In 2018 and 2021, XRP lacked the institutional infrastructure and regulatory clarity that now exist. The ETF-driven inflows and reduced exchange liquidity could mitigate the impact of whale outflows. Additionally, XRP's role in cross-border payments remains untapped compared to its 2018 peak, offering long-term growth potential.

However, risks persist. A breakdown below $2.90 could trigger a 18% correction toward $2.40, exposing deeper bearish momentum. The Aroon Down indicator at 92.86% and the broken descending triangle pattern reinforce this risk.

Investment Advice: Positioning for Uncertainty

For investors, the path forward requires balancing caution with opportunity.
- Bullish Play: Buy XRP on dips to key support levels ($2.90, $2.75) if the RSI remains in oversold territory and whale accumulation continues. Target $3.60 as a near-term breakout level, with $5.25 as a Fibonacci extension target.
- Bearish Hedge: Short XRP above $3.10 if it fails to hold the 20-week EMA ($2.55). A breakdown below $2.40 could accelerate the correction.
- ETF Exposure: Allocate to XRP ETFs (UXRP, XRPP) for regulated exposure, leveraging institutional-grade liquidity and reduced counterparty risk.

Conclusion

XRP's 94% profitability is a double-edged sword. Historically, it has signaled impending corrections, but 2025's unique catalysts—ETFs, regulatory clarity, and strategic whale accumulation—could transform this overhang into a springboard. While the bearish case remains valid, the convergence of technical strength and institutional adoption suggests a potential breakout. Investors must weigh the risks of a repeat collapse against the rewards of a market poised for reinvention.

In the end, XRP's fate may hinge on whether the current accumulation phase stabilizes the market or merely delays the inevitable. For now, the data tells two stories—one of caution, one of hope. The next few weeks will determine which prevails.