According to Glassnode data, XRP’s price has experienced an impressive surge of 500% over the past nine months, climbing to US$3.11 (approximately AU$4.77), with a staggering 93.92% of its circulating supply now in profit. While this rally began from a low of under US$0.40 (around AU$0.61), analysts have issued caution, noting that such high profitability levels have historically preceded significant market downturns.
To illustrate, in January 2018, over 90% of XRP holders enjoyed profits when the price neared US$3.30 (about AU$5.06). This peak was followed by a drastic 95% drop in prices. Similarly, in April 2021, XRP’s profitability also crossed the 90% threshold, just before a subsequent retracement of 85% when prices hit US$1.95 (around AU$2.99).
Adding to the caution, Glassnode’s Net Unrealised Profit/Loss (NUPL) metric, which contrasts unrealised gains with losses, has entered what is referred to as the “belief-denial” zone. This area has historically marked significant peaks in both 2017 and 2021, which were succeeded by major downturns.
### Price Volatility and Market Sentiment
Currently, XRP is trading around US$3.05 (approximately AU$4.68), maintaining a critical support level. If this level falters, analysts predict a potential decline to US$2.39 (around AU$3.67), signifying a significant drop of 23.5%. Conversely, if it successfully breaks through resistance levels, bullish momentum could see the price escalate to targets as high as US$6 (roughly AU$9.21).
Market sentiment appears to be split. While some investors remain hopeful, evidenced by whale activity such as a recent acquisition of 120 million XRP, indicating long-term confidence, analysts note that a breakthrough above resistance levels at US$3.37 (approximately AU$5.17) and US$3.50 (around AU$5.37) could spark upward movements toward US$4 (about AU$6.14) and beyond.
Various independent forecasts support the notion of potential gains. Rekt Fencer, the founder of X DAO, predicts XRP could trade between US$5.20 (about AU$7.98) and US$6.50 (approximately AU$9.98) within three to six months, a trajectory that could elevate its market capitalisation nearing US$400 billion (around AU$613.8 billion).
Despite this bullish sentiment, historical trends indicate that investors should approach with caution. Instances of significant profitability have frequently led to sharp market corrections, with analysts urging vigilance in the current climate.
In summary, while XRP’s dramatic rise presents enticing prospects for profit, its historical patterns and present indicators highlight the inherent risks associated with such volatility. The ongoing fluctuations in market sentiment mean that investors should carefully weigh potential gains against the spectre of past performances that have led to substantial losses.
