XRP Faces Steep Correction as On-Chain Metrics Signal Capitulation and Technical Breakdown Targets $1.10

XRP's Precarious Position: On-Chain and Technical Indicators Align for Downside

XRP finds itself at a critical juncture, with a confluence of on-chain data and technical chart patterns suggesting a significant price correction could be on the horizon. The digital asset is currently exhibiting strong bearish momentum, prompting traders and investors to reassess their positions as key support levels come under pressure.

On-Chain Distress Signals: The Profitability Plunge

A primary indicator of XRP's vulnerability comes from its on-chain profitability. According to Glassnode, only 43% of the total XRP supply is currently in profit, a level last observed in November 2024. Historically, a drop below the 50% threshold for this metric has often signaled a shift from market optimism to widespread despair, typically characterized by panic selling and capitulation.

This pattern has played out in previous bear markets. For instance, between January and June 2022, XRP's price tumbled from over $0.75 to $0.30, coinciding with its profitable supply falling to a mere 20%. A similar scenario unfolded in 2018, where XRP's price shed another 70% as the supply in profit dipped to 15%. The current environment mirrors these historical precedents, with investors who accumulated XRP above $2 over the past year realizing substantial losses, ranging from $20 million to $110 million daily since November 2025.

Analyst Crypto Town Hall noted on X that these figures reflect "widespread holder drawdowns, often seen during late-stage corrections," which can lead to sharp price declines as investors continue to cut their losses.

Investor Sentiment and MVRV: A Low-Risk Entry for Some, More Pain for Others?

Further compounding the bearish sentiment is the Mean Value to Realized Value (MVRV) ratio for XRP. Santiment reported that the average active wallet on the XRP Ledger has seen a 41% decline in investment value over the past year, marking the lowest MVRV for XRP traders since the FTX crash in November 2022.

While significantly negative average returns might imply a lower risk for new buyers entering the market – as competing traders are already in "blood in the streets" territory – it also suggests that existing holders are under immense pressure. This could trigger fresh waves of selling as investors seek to mitigate further losses, thereby fueling the ongoing downtrend.

Technical Breakdown Confirms Bearish Outlook

From a technical perspective, XRP/USD has executed a clear breakdown from a rising wedge pattern on the daily timeframe. This bearish formation typically occurs after a sharp decline, with price consolidating within two upward-sloping trendlines before breaking to the downside.

The price slipped below the wedge's lower trendline at $1.37 on March 27 and has since attempted a retest of this critical level, now acting as resistance near the 50-day simple moving average around $1.38. A failure to reclaim this trendline and moving average resistance would likely confirm the bearish continuation, with the pattern's measured target pointing toward $1.10. This represents a potential 16% drop from current levels.

This technical target aligns with market sentiment reflected on platforms like Polymarket, where bettors assign a 57% probability that XRP's price will reach $1.20 before the end of April. Previous analysis also suggested that a break below $1.27 could lead to declines toward $1.11 and potentially the psychological $1.00 mark.

What's Next for Traders

The convergence of on-chain capitulation signals and a confirmed technical breakdown paints a challenging picture for XRP in the near term. Traders should closely monitor the $1.37-$1.38 resistance zone. A sustained rejection here would reinforce the bearish outlook, making the $1.10 target, and potentially lower levels, increasingly likely. Conversely, a decisive reclaim of these levels would be necessary to invalidate the current bearish thesis, though such a move appears less probable given the prevailing market sentiment and data.