XRP Alert: 20% Price Drop Looms as Traders Cash In on $3 Surge—Top Analysts Warn

XRP's rally past $3 has traders locking in profits—and the hangover could be brutal.

Short-term pain ahead?

The token’s 20% predicted drop isn’t just a correction—it’s a classic case of ‘buy the rumor, sell the news.’ Whales are dumping, retail FOMO is fading, and the charts are flashing warning signs.

Market psychology at play

Every crypto bull run has its bagholders. This time, XRP’s surge attracted both institutional players and starry-eyed speculators. Now, the smart money is exiting while Twitter influencers insist ‘this is healthy.’

The cynical take

Wall Street’s ‘buy low, sell high’ mantra becomes ‘pump, dump, repeat’ in crypto. XRP’s volatility isn’t a bug—it’s the feature that keeps traders hooked (and broke).

TLDR

• 94% of XRP holders are in profit, signaling potential for a price drop due to profit-taking.

• XRP’s current rally has pushed the price to $3, a level historically linked to market tops.

• On-chain indicators show a bearish setup, with XRP potentially facing a 20% drop to $2.39.

• Despite risks, institutional interest and new inflows could help XRP avoid a deep correction.

XRP’s recent surge to over $3 has pushed 94% of its circulating supply into profit, according to data from Glassnode. This significant rally marks a massive 500% increase from XRP’s price earlier in the year, when it was trading under $0.40. However, such high profitability among holders has historically been a signal of overheated conditions, with previous market tops in 2018 and 2021 occurring when over 90% of holders were in profit.

As of the latest data, 93.92% of XRP’s supply is in profit. This level of profitability has historically coincided with a price correction. In early 2018, when XRP reached a peak NEAR $3.30, over 90% of holders were in profit, just before the market saw a massive 95% reversal. A similar scenario occurred in April 2021, when XRP’s price neared $1.95, only to experience an 85% crash.

On-Chain Metrics Point to Market Top

XRP’s current on-chain metrics are flashing warning signs that the cryptocurrency might be at a local top. One of the key indicators is XRP’s Net Unrealized Profit/Loss (NUPL), which tracks the difference between unrealized gains and losses on the network. Currently, the NUPL has entered the “belief–denial” zone, a phase typically observed before or during market tops.

The NUPL levels for XRP closely resemble those seen during the peaks of 2017 and 2021, suggesting that while investors are still in profit, the market is not yet in a state of full “euphoria.” However, if the NUPL moves into greed territory, the risk of significant profit-taking and distribution increases. This could further heighten the chance of a price drop, especially if it is followed by heavy selling pressure from holders looking to lock in gains.

XRP Faces Bearish Pattern: 20% Price Drop Possible

XRP’s price is currently consolidating inside a descending triangle, a classic bearish chart pattern. This pattern is characterized by lower highs and a horizontal support level near $3.05.

Recently, XRP briefly broke below this support level, triggering a fakeout before rebounding inside the pattern. The continued pressure from repeated tests of the lower trendline raises the risk of a breakout to the downside.

If XRP fails to hold above the $3.05 support, a confirmed breakdown could push the price down to $2.39, representing a drop of about 23.5% from current levels. A sell-off triggered by such a breakdown could lead to further losses if broader market conditions remain unfavorable.

Potential for XRP to Avoid Major Correction

Despite the bearish chart pattern and on-chain warning signs, XRP could avoid a deeper correction if new inflows, particularly from institutional investors, support the price. As the broader altcoin market gains momentum and demand for Ethereum-based assets rises, XRP could benefit from this trend and avoid a significant pullback.

Moreover, if XRP manages to break above the descending resistance line, it could regain its upward momentum. The key to this will be XRP’s ability to sustain above the $3.05 support zone and attract fresh capital to fuel the next leg of the rally. The current resistance lies between $3.25 and $3.50, and a breakout could target levels as high as $6.

Moreover analysts like Cryptobull projects that should xrp price break its major resistance, a rally to $7.20 would be on the way.

In the short term, the market seems to be consolidating, with XRP’s price testing key support and resistance levels. While bearish signs are present, particularly with the descending triangle and high profitability among holders, there is still room for optimism.