• XRP’s profitable supply fell to 58.5%, with 26.5 billion tokens now at a loss, heightening volatility.

• A bearish pennant on the 4-hour chart suggests potential drop to $2.00 support zone.

• Falling NVT ratio by over 50% indicates undervaluation, while declining exchange reserves and rising funding rates support rebound potential, per Glassnode and CryptoQuant data.

Explore XRP’s supply in profit decline and price correction in 2025: Bearish signals meet bullish metrics for potential recovery. Stay informed on XRP price analysis and market trends.

What is driving XRP’s supply in profit decline?

XRP’s supply in profit has plummeted to 58.5%, the weakest level since November 2024, as the token’s price dipped 5.29% to $2.14. This drop means nearly half of the circulating supply—about 26.5 billion XRP—now holds unrealized losses, even though the price remains nearly four times higher than last year’s lows. The imbalance stems from late entrants absorbing the correction’s brunt, eroding overall market confidence according to on-chain data.

How does the bearish pennant impact XRP’s price trajectory?

XRP trades within a bearish pennant on the 4-hour chart, characterized by a descending trendline that caps rallies near $2.30 resistance. Sellers dominate these upper boundaries, fostering lower highs and sustained downward pressure. Despite buyer defenses at $2.10, the pattern’s alignment with broader market weakness, including the profit supply drop, points to a possible breakdown toward the $2.00 liquidity zone. Historical data shows this level often sparks reactions, potentially halting further slides if demand intensifies. Glassnode metrics underscore this fragility, with top-heavy holdings amplifying reactions to negative news.

Source: TradingView

What does XRP’s falling NVT ratio reveal about network health?

The Network Value to Transactions (NVT) ratio for XRP has plunged over 50% in a single day, highlighting a surge in transactional activity relative to its market cap. This sharp decline suggests the token is undervalued, as on-chain volume rises in tandem with network usage during corrections. CryptoQuant analysis indicates that such drops often precede recoveries, as repositioning by traders boosts liquidity. However, the volatility tied to rapid shifts could extend short-term downside if liquidations accelerate. Overall, the metric points to strengthening fundamentals beneath the surface price action.

Source: CryptoQuant

Why are declining exchange reserves a positive sign for XRP?

XRP exchange reserves have decreased by nearly 3%, limiting the immediate selling pressure on major platforms like Binance. This reduction implies holders are moving tokens to private wallets, signaling confidence in long-term value amid the correction. While the bearish pennant maintains short-term bearish control, lower reserves ease the risk of forced sales during dips. CryptoQuant data supports this as a precursor to accumulation phases, though sustained buying is needed to shift momentum. The development fosters a more balanced market, potentially stabilizing prices around key supports.

Source: CryptoQuant

How are rising funding rates influencing XRP traders?

Funding rates for XRP have spiked over 50%, reflecting heightened long positions as traders bet on a rebound from the $2.00 support. This surge indicates bullish sentiment, with leveraged bets increasing despite the ongoing correction. However, it also elevates liquidation risks if prices wick lower unexpectedly. The trend aligns with the improving NVT ratio and falling reserves, suggesting coordinated optimism for consolidation. CryptoQuant observations note that such funding elevations often precede rallies once supports hold firm.

Source: CryptoQuant

Frequently Asked Questions

What caused XRP’s recent 5.29% price drop?

XRP’s price fell 5.29% to $2.14 due to a shrinking supply in profit reaching 58.5%, per Glassnode data, combined with a bearish pennant pattern on charts. Late buyers now face losses on 26.5 billion tokens, amplifying selling pressure and market fragility in this correction phase.

Will XRP rebound from the $2.00 support level?

Yes, XRP shows rebound potential at $2.00, supported by falling NVT ratios indicating undervaluation, declining exchange reserves reducing sell pressure, and rising funding rates signaling long trader confidence. These metrics, from CryptoQuant, suggest a reaction rally if buyers hold this historical liquidity zone.

Key Takeaways

• XRP supply in profit decline: At 58.5%, the lowest since November 2024, it exposes vulnerability with 26.5 billion tokens in loss, per Glassnode.
• Bearish pennant risks: The 4-hour chart pattern targets $2.00, though buyer defenses at $2.10 could limit downside.
• Bullish recovery signals: Falling NVT, lower reserves, and higher funding rates point to undervaluation and potential rebound; monitor $2.00 for entry.

Conclusion

In summary, XRP’s supply in profit decline and bearish pennant formation underscore current market pressures, yet falling NVT ratios and declining exchange reserves signal emerging strength for a rebound. As funding rates rise, traders eye the $2.00 zone for stabilization. Investors should track on-chain metrics closely for opportunities in this evolving XRP price landscape, positioning for potential upside in the coming weeks.