XRP has entered one of its weakest profitability phases in nearly two years, with only 43.4% of the circulating supply still trading above cost basis. That drop has left most holders underwater and turned the market into a far more fragile environment for both retail traders and institutional participants.
The pressure has not come from one source alone. A long stretch of monthly price declines has collided with ETF outflows and uneven whale behavior, creating a market where confidence has weakened even as available supply has started to tighten.
With more than half of the supply underwater, investors who accumulated above $2 over the past 12 months have been realizing losses at a pace of $20M – $110M/day since November 2025.
📉https://t.co/nvfgww08Hk https://t.co/tfmI4cB6H0 pic.twitter.com/ApG84ruSjr— glassnode (@glassnode) April 6, 2026
Profitability has collapsed, but supply is not moving in one direction
By April 6–7, 2026, more than 56% of XRP’s circulating supply — around 34.75 billion tokens — was sitting at a loss. That imbalance shows how deeply the recent decline has damaged holder positioning, especially after six straight monthly drops pushed XRP down to roughly $1.33.
Institutional flows have reflected the same deterioration. Spot XRP exchange-traded products saw about $31.16 million in net outflows during March, followed by another roughly $1.25 million in early April, cutting assets under management from $1.65 billion in January to about $950.58 million.
That is the clearest sign that the weakness has not been limited to retail sentiment. Capital has been leaving institutional XRP products at the same time that profitability across the broader holder base has been deteriorating, reinforcing the sense that the market is still in a defensive phase.
Whale activity is tightening supply, but conviction is still uneven
On-chain behavior has been more complicated than the ETF picture suggests. Large holders were buying aggressively in early April, with accumulation reportedly rising above 11 million XRP per day, while deposits from whales to major exchanges dropped to around 12.6 million XRP on average.
That pattern reduced immediate sell pressure on exchanges and helped tighten available supply. When large holders accumulate while exchange inflows decline, the market can become more vulnerable to sudden upside squeezes because there is less liquid inventory readily available to absorb buying.
Even so, the whale picture has not been uniformly constructive. Other on-chain readings showed that about 510 million XRP was distributed by large holders in the days leading into April 6, which means accumulation has been real but not uninterrupted.
The market is now caught between tighter supply and weaker confidence
That leaves XRP in a tense setup. Retail holders are broadly underwater, institutional flows have weakened, and derivatives activity is still adding short-term volatility, but reduced exchange supply means any change in demand could move price more sharply than usual.
The next move is likely to depend on whether large-holder accumulation continues or whether distribution regains control. If exchange inflows remain low and whales keep absorbing supply, XRP could become more prone to upside squeezes, but if ETF outflows continue and larger holders resume selling, downside pressure will stay firmly in place.