Investors “Dumping” XRP as Correction Risks Rise: On-Chain Data Signals Caution

Despite recent price surges, on-chain data for XRP paints a more cautious picture, suggesting mounting risks of a market correction. While outward enthusiasm for XRP has been high, underlying data reveals significant profit-taking by long-term holders, creating a quiet but impactful selling pressure. This disconnect between visible optimism and fundamental signals is raising questions about the sustainability of the current rally. Several technical indicators also point to an increased likelihood of a price reversal, suggesting a fragile market balance.

Whale Exodus from XRP Market

XRP has reportedly tripled in value since November 2024, drawing considerable attention from both retail and institutional investors. However, behind this rise, early XRP holders are reportedly realizing substantial profits, estimated at an average of $68.8 million per day over the past seven days, according to Glassnode data. These are investors who acquired XRP for under $0.50 and are now cashing in on gains exceeding 300%.

This wave of “crypto distribution” is accelerating as XRP’s value has surged, indicating that many early investors are choosing to secure their profits amid the market’s euphoria.

Several objective factors highlight the scale and potential concerns of this trend:

• New Entrant Dominance: Nearly 70% of XRP’s “realized capitalization” (a metric valuing coins at their last on-chain movement) was formed between late 2024 and early 2025. This suggests the market is now largely dominated by newer participants.
• Concentrated Selling: The most profitable investors are reportedly driving the majority of selling, leading to a concentration of outgoing flows from a minority of addresses.
• Echoes of 2017 Peak: The current behavior of these high-gain holders is reminiscent of 2017, when XRP reached a peak above $2.50 before experiencing a dramatic 90% collapse.
• “Unbalanced Market”: This scenario, described as an “unbalanced market with strongly winning positions in exit phase,” increases XRP’s vulnerability to sharp corrections if market volatility returns.

These on-chain insights imply that XRP’s recent price appreciation may be built on a precarious foundation, heavily influenced by profit-taking. If this trend continues, it could exert significant downward pressure on market dynamics in the coming weeks.

On-Chain Indicators Suggest Potential 35% Decline

Beyond the sales volumes, several technical metrics reinforce the increasing pressure on XRP’s price. The SOPR (Spent Output Profit Ratio) indicator, which measures whether cryptocurrencies are sold at a gain or loss, reveals a concerning trend among holders who acquired their XRP between three and six months ago (just after the start of the bullish rally).

According to Glassnode, this cohort’s SOPR is “steadily declining,” meaning these investors are beginning to sell at a loss even as other segments of the market stabilize their behavior.

Further insights from realized price data by holder age indicate that the average purchase price for holders in the 3-6 month bracket is approximately $2.28, while for those in the 6-12 month bracket, it’s around $1.35.

With XRP currently trading around $2.02, newer entrants are near their breakeven point. In contrast, longer-term holders (6-12 months) still have a safety margin of nearly 35% before reaching their profitability level. Should the price continue to fall, this latter group of investors could also be triggered to sell, intensifying the downward pressure.

From a technical chart perspective, XRP’s weekly chart is showing a descending triangle pattern, often associated with a trend reversal. If this pattern confirms, the price could decline to the $1.35 to $1.60 zone, or even test a support level around $1.30. Conversely, a sustained recovery above the 50-week exponential moving average (EMA 50) could enable XRP to rebound and aim for new highs around $3.00. The crypto market remains in a delicate balance, caught between significant selling pressure and a potential technical rebound.