XRP News: 42% of holders suffer a 40% loss, panic selling drives it down to $1.5

Glassnode's latest report has a pessimistic outlook on XRP price predictions, indicating that 42% of current XRP wallet holders accumulated tokens when it was close to $3, resulting in many suffering losses of 40% or more. Analysts warn that long-term unrealized losses may trigger panic dumping in the market, adding more pressure to an already fragile market outlook, with XRP currently approaching the $1.50 support area.

XRP data reveals 42% holders are deep in loss

(Source: Glassnode)

According to Glassnode's latest on-chain metrics report, this XRP news poses a serious warning to the market. 42% of current XRP wallet holders accumulated tokens near the high of $3, while the current XRP price hovers between $1.80 and $2.00, meaning these investors are facing unrealized losses of 40% or more. This large-scale loss distribution is extremely dangerous in the cryptocurrency market as it represents a potential dumping bomb.

The “Percentage of Supply in Profit” indicator from Glassnode clearly shows that although the price of XRP is still nearly 4 times higher than it was last November, many investors seem to have entered the market at the wrong time. This surge was triggered by some legal victories against the U.S. Securities and Exchange Commission, at which point market sentiment peaked, and FOMO (fear of missing out) spread, attracting a large number of buyers chasing the price at high levels.

Investors who bought around $3 are now facing a tough psychological test. Behavioral finance research shows that when investors' unrealized losses exceed 30% to 40%, their decision-making often becomes emotional. Some may choose to “hold on for dear life,” hoping for a price rebound; while others may opt to cut losses and exit due to the unbearable ongoing paper losses. Once panic spreads, the proportion of the latter group will rise rapidly, leading to a cascading sell-off.

Analysts warn that long-term unrealized losses could trigger a panic sell-off in the market, adding greater pressure to an already fragile market outlook. As market sentiment remains close to historical lows, if the overall market continues to decline, investors who have seen their stock prices drop may begin to sell their shares. Once this panic selling is triggered, it often creates a self-reinforcing vicious cycle: selling leads to price declines, and price declines trigger more selling.

The high position接盤 disaster after SEC victory

The key background of this XRP news is the legal battle between Ripple and the SEC. In July 2023, a U.S. district court ruled that XRP is not considered a security in certain circumstances, which was seen by the market as a partial victory for Ripple. Subsequently, in 2024, the SEC reached a settlement with Ripple, ending a five-year lawsuit. This positive news propelled the price of XRP from around $0.50 to a historical high of $3.65.

However, it is this rapid rise that has attracted a large number of retail investors to enter at high levels. There is a classic phenomenon in technical analysis: towards the end of a rapid rise, trading volume often peaks, and this volume mostly comes from the last batch of retail investors chasing the highs. Glassnode data shows that 42% of holders accumulated tokens when approaching 3 dollars, which is a perfect confirmation of this phenomenon.

The Dilemma Facing High-Level Buyers

High cost line: Buying around 3 dollars means that the XRP price needs to return to historical highs to break even.

Psychological pressure is immense: A 40% paper loss is enough to destroy most retail investors' confidence in their investments.

Lack of New Catalysts: The positive effects of the legal victory have already been fully digested, and there is a lack of momentum to push the price back to $3 in the short term.

Such situations are not uncommon in the history of cryptocurrency. When Bitcoin crashed from $20,000 in 2017, many investors who bought at the high experienced a three-year bear market before they had the chance to break even. After Dogecoin plummeted from $0.70 in 2021, many investors are still deeply stuck in it. XRP's current situation is highly similar to these cases, which is why this XRP news is so attention-grabbing.

Technical Warning: $1.50 support is at risk

(Source: Trading View)

XRP is approaching the support area of $1.50 after failing to hold the recent consolidation level, and may face the risk of breaking below that area. The chart shows a descending structure is forming, and any rebound may encounter resistance around $2.50 and near the high of $3.60.

From a technical analysis perspective, XRP is undergoing a typical downtrend. After peaking at $3.65, it has experienced a series of lower highs and lower lows. The current price structure indicates that bullish strength is gradually weakening, while bears have taken control. The support level at $1.50 is a convergence of multiple technical factors; if it fails to hold, the next support level may be far in the range of $1.00 to $1.20.

The formation of a descending structure means that even if a rebound occurs, it is likely to be a short-term technical rebound rather than a trend reversal. Around $2.50 is an important resistance level during the previous decline, as this price range used to be a support level and often turns into a resistance level once broken. The $3.60 high point is a stronger psychological resistance level, with a large number of trapped positions concentrated in that area. Once the price rebounds to this level, the selling pressure will be very heavy.

If market sentiment begins to improve and the support level remains stable, XRP may recover in phases - but for now, its momentum remains weak. Volume analysis shows that the recent decline has been accompanied by higher trading volume, while the volume during rebounds has significantly shrunk, which is a typical sign of weakness. Technical indicators such as RSI and MACD are also in the bearish zone and have not shown any reversal signs.

Can ETFs Become a Lifeline?

The only highlight in this XRP news is the upcoming launch of multiple XRP exchange-traded funds (ETFs) in the United States. The launch of multiple XRP ETFs in the United States provides a long-term catalyst that could unleash institutional demand once market conditions stabilize.

Several asset management companies have submitted XRP ETF applications to the U.S. Securities and Exchange Commission, including well-known institutions such as Grayscale, Bitwise, and 21Shares. If these ETFs are approved and listed, they will provide institutional investors with a compliant investment channel for XRP. The successful cases of the Bitcoin ETF and Ethereum ETF launch show that ETFs can attract a large amount of traditional financial capital into the cryptocurrency market.

However, the potential impact of the ETF needs to be viewed rationally:

The Positive Aspects of ETF

· Provide compliant investment channels for institutional investors, which may introduce billions of dollars in new funds.

· Enhance the mainstream acceptance and brand awareness of XRP

· To create structural buying pressure, ETF managers need to purchase XRP in the secondary market to support the product.

Limitations of ETFs

· Approval and launch take time, and cannot resolve short-term dumping pressure.

· The speed of institutional capital inflow may not meet market expectations.

If the XRP price continues to decline before the ETF launch, it may affect the interest of institutional investors.

For the 42% of holders currently deep in losses, ETFs seem more like a distant hope rather than an immediate salvation. The reality they face is whether they can endure the psychological pressure of continuing to hold, and whether they are willing to wait for months or even longer for a potential recovery.