XRP Faces Pressure at $3 as Co-Founder’s $175M Transfer Triggers Sell-Off

Ripple’s XRP token is under heavy selling pressure this week after a large transfer of funds by co-founder Chris Larsen spooked traders and triggered a wave of profit-taking. The token, which had climbed to a recent high of $3.66, is now hovering just above $3.07. With the psychologically critical $3 level in focus, analysts warn that a breakdown could bring XRP back into its lower support zones, adding further volatility to a market already on edge.

Ripple Co-Founder Moves $175 Million in XRP

The entire crypto market has been feeling the pressure this week but we can confidently say that XRP is getting hit particularly hard. After a strong run that saw it touch a recent high of $3.66, the token has fallen back to just above the psychologically critical $3 level. The air is thick with FUD, well we can say it’s all thanks to a significant move by one of Ripple’s co founders.

What really happened? On July 17, crypto sleuth ZachXBT dropped a bombshell, reporting a massive transfer from Chris Larsen’s wallets. We’re talking a cool $175 million in XRP, with a staggering $140 million of that making its way to various exchanges. While this game plays its course a move like that from an insider is a major red flag. When a founder starts moving that much capital, the market’s first instinct is to assume a dump is incoming. It’s a classic “sell the news” scenario, only this time, the news is a potential liquidation by an OG. 

So, what are your thoughts? Is this a temporary setback, or the start of a larger correction?

Whale Moves and Profit Pressure Converge

This sell off was not triggered by Larsen’s move alone. A broader market condition has amplified the fallout: over 93% of all XRP supply is currently in profit, according to blockchain analytics platform Glassnode. That’s a historically high number and often a sign that holders may start taking profits.

The psychology here is simple: when almost everyone is sitting on gains, the likelihood of selling increases, especially when fear enters the market, such as when a whale unloads. Comparatively, Ethereum’s current “supply in profit” ratio is 84.7%, which analysts still consider below the threshold of aggressive profit-taking.

Short Term Holders Drive Volatility

Data from Glassnode further reveals that short-term XRP holders, those who entered the market within the past one to three months, are playing a central role in the latest downturn. These holders were sitting on unrealized gains of 20% to 30% when XRP topped $3.66.

Now, as prices retrace, many of these investors are now choosing to lock in profits or minimize losses. XRP is currently drifting back toward what analysts refer to as its “realized price” range for short-term holders, which sits between $2.30 and $2.80.

$3 Remains the Psychological Battleground

The next critical question is whether XRP can hold the $3 support level. Psychologically, round numbers like $3 often act as support or resistance zones in crypto markets. They carry no technical magic, but their simplicity makes them important for trader sentiment.

Analysts caution that the downside momentum would carry XRP to its lower limit-holder realized price of between $2.30, should it break down and remain below the $3 point. The price at $2.80 could help provide support, although the rate of selling and switch into competing cryptocurrencies such as Ethereum and Binance Coin may see that momentum sustained and driven lower.

Rotation into Other Majors

The decline in XRP is also indicative of a larger macro trend, which is a rotation out of weak, or poorly performing, assets and into fresh momentum tokens. Ethereum and Binance Coin have both enjoyed new inflows this week, at least at the expense of XRP and mid-cap tokens.

Such is the rotation that occurs when there are market consolidation periods. Investors seek assets that have a more precise risk of increased upside or more promising technical arrangements. Other majors can take advantage of XRP as it reconciles with profit-taking and general uncertainty among investors.

Nevertheless, there are still analysts who consider this retreat as a healthy elective taking into account that it is not a protracted inversion.

Investor Sentiment Divided

XRP community has reacted both ways. There are those who believe the fix is an excessive response to behavior that can be expected of the whales. Some are also more reserved, and they use the fact that Ripple says nothing regarding the intention of Larsen transfer as the argument.

The politics of doing so, particularly at a local high point of costs in real terms, make a difference. Perceived insider selling even when it is not clear in motivation leads to negative response by traders which are emotional in nature. Therefore, when there is no openness, speculation entertains the void, and establishes even more than would have been avoided given openness.

This situation is sparking renewed conversation about whether XRP’s recent price action is sustainable or if the asset has entered another overextended cycle. For more in-depth commentary on that debate, read this timely piece: Is XRP Crashing?