XRP holders have endured a brutal wave of capitulation, but new on-chain data shows that the worst of the sell-off may finally be in the rearview mirror.
According to the crypto analytics firm Santiment, XRP has just recorded its largest spike in on-chain realized losses since late 2022.
Complete capitulation
A "realized loss" occurs when an investor sells their coins at a price lower than their original purchase price. It indicates that a large number of traders are panicking and locking in their losses. According to Santiment, this behavior is a hallmark of "fear taking over" the market since it usually means the "weak hands" have already sold their positions.
With the panic sellers flushed out, there is a significantly reduced overhang of potential sellers left to drive the price lower.
In simple terms, the heavy damage has already been done, and the market has reached an emotional tipping point.
The chart above features a massive downward spike in the purple line. Over the course of the week, those total realized losses ballooned to a staggering $1.93 billion.
It is worth noting that the XRP network witnessed a weekly realized loss milestone of this exact magnitude roughly 39 months ago. The price of the Ripple-linked altcoin proceeded to jump 114% over the subsequent eight months.
Not a guarantee
Of course, it is widely known that extreme fear tends to peak before the actual price bottom. At this time, Santiment was prudent enough to caution XRP bulls that this huge realized loss spike does not necessarily guarantee an overnight rally. However, even a small influx of new buying pressure can push prices significantly higher due to the current seller exhaustion.
Dan Burgin
Vladislav Sopov
