Why 26.5 Billion XRP Tokens Face Losses Despite Price Surge

XRP is currently facing renewed challenges as a significant market downturn affects its profitability metrics, reminiscent of levels observed during Donald Trump’s re-election campaign in November 2024.

Recent data from Glassnode indicates that merely 58.5% of XRP’s circulating supply is currently profitable. This marks the lowest profit rate since late November 2024, a time when the token's value was approximately $0.53.

As XRP trades around $2.15 today, a staggering 41.5% of the total circulating supply, which translates to nearly 26.5 billion tokens, are now reflecting a realized loss.

According to analysts, this imbalance in profitability reflects how this year’s trading volumes have clustered around higher price points, leaving latecomers vulnerable as momentum diminishes.

As per CryptoSlate's research, XRP has experienced a 12% decline over the past six months and is currently trading 40% below its peak of $3.65 reached in July.

The ongoing challenges for XRP are compounded by a notable decline in derivatives activity, which has contributed to a cautious market sentiment.

Data from CoinGlass reveals that XRP futures open interest has plummeted to approximately $3.8 billion, a stark decrease from nearly $10 billion earlier this year.

Open interest serves as a metric for active futures contracts' value. A decline in open interest typically signals a weakening of speculative demand, suggesting that traders are retreating from making directional bets.

This trend helps clarify why XRP's price growth has significantly stalled since its surge following the elections. The token has largely traded sideways, maintaining a tight range around $2.10, which has disappointed many traders who anticipated a breakout beyond that threshold.

Furthermore, XRP's price difficulties are exacerbated by increased activity from long-term holders, who appear to be adjusting their positions amidst the current market conditions.

In summary, XRP stands at a crossroads, grappling with a substantial number of tokens now trading at a loss. The interplay of market sentiment, trading volumes, and speculative activity plays a critical role in shaping the token's future. As traders and investors keep a close watch on these dynamics, the coming weeks will be crucial for XRP's potential recovery or continued struggle.