XRP Sees Largest Spike in On-Chain Realized Losses Since 2022

The cryptocurrency market has experienced a significant wave of capitulation in recent weeks, with XRP being one of the most affected assets. According to on-chain data provided by Santiment, XRP has recorded its largest spike in realized losses since late 2022.

Realized losses occur when investors sell their coins at a price lower than their original purchase price, indicating that they are locking in their losses and exiting the market. This behavior is often seen as a sign of extreme fear taking over the market, but it also serves as a contrarian price signal.

A previous instance of this level of realized loss occurred 39 months ago, in November 2022. Following that event, the price of XRP jumped 114% over the subsequent eight months. While this does not guarantee an immediate rally, it suggests that the worst of the sell-off may be behind us.

Santiment notes that once the sellers are fully exhausted, even a small influx of new buying pressure can push prices significantly higher. This is in line with the psychological lifecycle of a market correction, which often sees traders panic and lock in losses before prices begin to recover.