Mr. Steph Is Crypto Signals Sharp Drop in XRP Holders' Profitability — Could a Major Price Reversal Follow?

Mr. Steph Is Crypto, a prominent crypto commentator, has highlighted a significant decline in the profitability of XRP holders that may presage a major market reversal. According to the analyst, 48% of XRP's 60.57 billion circulating supply is currently underwater, meaning those tokens were acquired at prices higher than the present market value. This observation comes amid a broader market sell-off and raises important questions about support levels, resistance, and the potential for a sustained trend change.

The drop in on-chain profitability is a classic market signal. When a large portion of holders are in loss, short-term selling pressure can ease because those holders are less likely to liquidate immediately — they may be waiting for break-even or better opportunities. Conversely, a heavy concentration of underwater supply can also create latent selling pressure if negative news triggers panic. Interpreting these dynamics requires careful analysis of volume, distribution of holdings, and recent flow into exchanges.

From a technical standpoint, markets often respond to capitulation events — periods when weak hands exit and stronger hands accumulate. If the current decline in holder profitability reflects capitulation, we could see a re-accumulation phase that sets the stage for a rebound. Key areas to watch for XRP include historical support zones, the proximity of major liquidity pools, and how quickly exchange inflows change. Sustained low profitability combined with falling exchange supply can be bullish; rising exchange inflows with low holder profitability is typically bearish.

Important on-chain metrics to monitor alongside profitability include: realized price distribution, age of UTXO-equivalent balances, exchange netflows, and concentration among top wallets. When available, overlaying these metrics with order book liquidity and options market skew can provide deeper insight into whether the market is positioned for a reversal or continuation.

Risk management remains essential. Even if on-chain signals point toward a potential reversal, confirmation via price action — such as reclaiming a defined resistance band or forming higher lows on relevant timeframes — is critical before increasing exposure. Traders should also consider correlation with broader market indices and macro factors that could accelerate or delay any reversal scenario.

In summary, Mr. Steph Is Crypto's observation that almost half of XRP's circulating supply is underwater is a meaningful signal that should not be ignored. It can indicate either latent selling pressure or the conclusion of a distribution phase followed by accumulation, depending on accompanying metrics. Monitoring exchange flows, realized price clusters, and price structure will be crucial to discern whether the market is tilting toward a major reversal or further consolidation.

Disclaimer: This article is for informational and analytical purposes only and does not constitute financial advice. Always perform your own research and consider your risk tolerance before trading.