XRP has just recorded its largest on-chain realized loss spike in nearly four years, triggering fresh debate over whether the market is approaching a turning point.
- XRP prints biggest realized loss spike since 2022 (-$1.93B).
- Similar past event was followed by a strong multi-month rally.
- Extreme capitulation often signals a potential market bottom.
According to on-chain analytics platform Santiment, weekly realized losses recently plunged to around -$1.93 billion – the most severe drawdown since 2022.
The last time losses reached similar levels was roughly 39 months ago. In the months that followed, XRP delivered a powerful 114% advance over the next eight months, highlighting how extreme capitulation events can precede major recoveries.
Capitulation Reaches Extreme Levels
Realized losses occur when investors sell their holdings below their original purchase price. A surge in this metric signals widespread panic, as traders lock in losses rather than wait for a rebound. Historically, such events tend to reflect emotional exhaustion across the market.
When a large share of short-term holders exit positions at a loss, selling pressure can gradually weaken. In simple terms, once weaker hands have sold, fewer participants remain willing to push prices lower. That dynamic can create conditions for stabilization and eventual recovery.
Why Large Loss Spikes Matter
Major spikes in realized losses have often appeared near market bottoms across various crypto cycles. Fear typically peaks before price does. After aggressive capitulation, even modest buying pressure can shift momentum higher.
While this pattern does not guarantee an immediate rally, it increases the probability that a significant portion of downside pressure has already been absorbed. Historically, these phases have marked transition points rather than continuation phases.
Market Context
XRP is currently trading around $1.41, reflecting ongoing volatility across the broader crypto market. Sentiment remains fragile, but on-chain data suggests that emotional extremes may already be unfolding beneath the surface.
Investors are now closely watching realized profit and loss trends for signs of stabilization. If history repeats, the latest spike in realized losses could represent less a sign of collapse and more a signal that the bulk of forced selling has already taken place.
At the time of writing XRP is trading around $1.42 – down more than 60% from its ATH of around $3.86.
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Source: https://coindoo.com/xrp-news-altcoin-sees-biggest-realized-loss-since-2022/