XRP has been one of the hottest stories in crypto this year. After an impressive rally from below $0.40 to above $3.00, nearly 94% of all circulating XRP is now in profit, according to Glassnode. This level of profitability sounds like every investor's dream, but history suggests it could also be a warning sign.

History Repeats: Profitability at Extremely High Levels

When the overwhelming majority of holders are in profit, markets often find themselves at a critical turning point. For XRP, this moment has arrived before. In early 2018, the token surged to nearly $3.30 with over 90% of the supply in profit, only to collapse over 95% in the following months. A similar pattern unfolded in 2021, when profitability levels crossed the same threshold just before XRP sharply fell from its local peak. The lesson is that extreme profitability can quickly shift from a bullish signal to a setup for mass profit-taking.

NUPL Signals Indicate Familiar Risk

Supporting this cautious view is the Non-Realized Profit/Loss (NUPL) indicator of XRP. This metric tracks unrealized gains across the network and has now entered the so-called 'belief–denial' zone. Historically, this zone has marked moments when investors are highly confident but not yet euphoric—often the last stage before a peak. We saw this in late 2017, as well as in 2021, both followed by sharp corrections. While today’s readings do not yet suggest total euphoria, the parallels with past cycles cannot be ignored.

Technical Picture: Triangle at a Crossroads

From a technical standpoint, the structure of the XRP chart is also adding weight to the cautious narrative. The token is consolidating within a descending triangle, with a clear horizontal support near $3.05. Repeated tests of this support level increase the risk of a breakdown, which could open the door for a move towards the $2.40 region. Such a correction would represent a drop of approximately 20% from current levels. On the other hand, if bulls manage to regain momentum and break the descending resistance line, this could invalidate the bearish setup and potentially trigger a rally towards $6, an outcome that some traders are still watching.

What Could Keep XRP Afloat

Despite these technical and on-chain warnings, XRP continues to benefit from renewed market momentum and optimism around altcoins. Institutional interest and new inflows may act as a buffer against heavy selling pressure, especially if the overall sentiment in cryptocurrencies remains strong. In this scenario, XRP could sustain its current levels or even extend gains, challenging historical patterns.

The Path Forward

Ultimately, XRP is at a familiar crossroads. On one side is the weight of history, flashing a warning sign as profitability levels and network metrics reflect previous market highs. On the other side is the possibility that this time could be different, with new demand keeping prices supported despite stretched indicators. For traders and investors, the coming weeks will be critical in determining whether the XRP rally has already peaked or if the token still has room to rise further.

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