XRP's profitable supply has fallen to its lowest level since July, as the digital asset faces continued pressure from regulatory uncertainty and technical selling.
The token, created by Ripple Labs, trades at $0.50, marking a 6 per cent decline since October 2 when the Securities and Exchange Commission filed notice to appeal a federal court ruling favorable to the company.
Market data from analytics firm Santiment shows the percentage of XRP supply held in profit has dropped to 70.4 per cent, down from 90 per cent in early October. The metric last touched these levels on July 12.
"The sharp decline in profitable supply often precedes increased selling pressure," notes a senior crypto derivatives analyst at a leading digital asset firm. "Holders facing losses typically show reduced tolerance for further downside."
Technical indicators suggest mounting pressure. The Relative Strength Index has fallen to 38.77, reflecting sustained selling activity. The breach of critical support at $0.52 has opened the possibility of further declines.
The SEC's October 10 appeal challenges a court ruling that programmatic sales of XRP to retail investors did not violate securities laws. Ripple has announced plans for a cross-appeal, extending legal uncertainty.
"The regulatory overhang continues to dominate price action," observes a crypto market strategist at a major trading desk. Fibonacci Retracement analysis suggests the next support level lies at $0.46.
Market makers warn that failure to hold current levels could trigger a retreat to $0.38, matching the July 5 low. This scenario would represent a significant drawdown from recent highs.
Trading volumes indicate sustained selling pressure across major exchanges. However, some market participants see potential for a technical bounce if the token reclaims the $0.52 level.
The decline highlights broader challenges facing digital assets subject to regulatory scrutiny. XRP's case has been closely watched as a potential precedent for the treatment of cryptocurrency tokens under securities laws.
Order book data suggests significant resistance around $0.60, should buyers return to the market. However, analysts note that regulatory clarity may be necessary for sustained price recovery.