XRP’s recent rally to above $3 has pushed nearly all of its circulating supply into profit.
According to Glassnode data, 93.92% of XRP’s supply was in profit as of Sunday.
This surge reflects a massive gain of more than 500% in just nine months, with XRP climbing from under $0.40 to a recent peak of $3.11.
Such widespread profitability highlights the strength of the rally but also raises questions about sustainability.
Historical Patterns Suggest Risk at High Profit Levels
Glassnode’s data shows that when more than 90% of XRP holders are in profit, the cryptocurrency often approaches a macro top.
In early 2018, XRP’s profitability above 90% coincided with its peak near $3.30 before the price collapsed by 95%.
A similar dynamic unfolded in April 2021, when XRP traded around $1.95 with high profitability levels, only to later suffer an 85% decline.
The current scenario mirrors those conditions, suggesting the possibility of increased selling pressure as investors lock in profits.
NUPL Data Points to Market Top Warning
XRP’s Net Unrealized Profit/Loss (NUPL) indicator adds another layer of caution.
The metric, which tracks unrealized gains and losses across the network, has entered the “belief–denial” zone.
This stage often emerges before or during market peaks.
Back in late 2017, XRP’s NUPL surged to similar levels just before XRP peaked above $3.30.
The same signal appeared in April 2021 when readings above 0.5 marked the high near $1.95.
Although the indicator suggests strong profitability, it has not yet entered the “euphoria” stage.
Still, analysts warn that if NUPL rises further toward greed levels, profit-taking could accelerate.
Can New Demand Prevent a Correction?
Despite signs of overheating, XRP could still withstand selling pressure if fresh inflows arrive.
Institutional participation, coupled with renewed momentum across altcoins, could provide the liquidity needed to sustain higher levels.
Analysts note that market tops do not occur in isolation and often depend on broader sector sentiment.
If institutional demand grows, XRP may extend its rally and hold above the $3 level.
Descending Triangle Raises Technical Risks
From a technical standpoint, XRP is showing signs of consolidation.
The cryptocurrency is currently trading within a descending triangle pattern, defined by lower highs pressing against horizontal support near $3.05.
Earlier this month, XRP briefly broke below this level before bouncing back, but repeated tests increase the risk of a decisive breakdown.
If XRP falls below $3.05, it could trigger a move toward $2.39 by September, representing a potential decline of about 23.5%.
However, if bulls manage to break through the descending resistance line, the bearish setup could be invalidated.
Some market watchers believe that in such a scenario, XRP could rise significantly, with price targets as high as $6 being discussed.
Outlook for XRP Holders
XRP’s surge has delivered major profits to long-term holders, but historical signals point to caution.
Both Glassnode’s profitability data and NUPL readings suggest conditions that have previously led to steep declines.
If the cryptocurrency attracts strong new demand, the correction may be shallow.
But without sustained buying momentum, XRP could face a significant pullback in the weeks ahead.