Realized-Loss Spike Suggests XRP May Be Near a Market Bottom
Recent on-chain data suggests XRP may be nearing a critical turning point, as mounting investor fear could signal a prime opportunity.
Data from Santiment shows XRP has logged its largest surge in realized losses since 2022, an event that has historically preceded strong price rebounds and renewed bullish momentum.
Well, realized losses occur when investors sell below their entry price and typically spike during periods of uncertainty as traders exit to limit further downside. While this reflects bearish sentiment, such capitulation often signals market exhaustion and the potential for a trend reversal.
With “Bitcoin is dead” searches hitting record highs, historical cycles suggest extreme pessimism around Bitcoin has frequently preceded strong altcoin rallies, positioning XRP as a potential beneficiary if sentiment shifts.
Therefore, the spike in realized losses signals a clear capitulation phase among XRP holders, as panic selling forces weaker hands out of the market. This washout typically reduces selling pressure, laying the groundwork for price stabilization and a potential rebound.
According to CoinCodex data, XRP is currently trading at $1.37, with $1.45 emerging as the critical breakout level. A decisive move above this resistance could confirm renewed bullish momentum and ignite the next upward surge.
XRP Realized-Loss Spikes Signal Potential Market Turnaround
Historical trends strengthen this outlook. The last major realized-loss event of about $1.93 billion nearly 39 months ago, preceded a 114% rally within eight months.
While history isn’t predictive, such periods of extreme pessimism have repeatedly signaled potential turning points in XRP’s market cycle, often setting the stage for strong recoveries.
Sharp spikes in realized losses often signal market bottoms, as peak fear typically forces risk-averse investors to exit before prices recover. Once selling pressure is exhausted, even moderate demand can drive strong rebounds.
That setup may be forming for XRP, with trading activity accelerating across major exchanges, volume has surged 83% on Upbit, 68% on Binance, and 34% on Coinbase, a sign that renewed participation could set the stage for a potential trend reversal.
Why does this matter? Well, tracking realized profit and loss offers a clearer window into market psychology than price charts alone, revealing whether investors are accumulating, holding, or capitulating.
Sharp spikes in realized losses often mark emotional extremes, when sentiment turns deeply negative and selling pressure becomes exhausted. Historically, such moments can precede market reversals as prices begin to move against prevailing pessimism.
While a rally is not guaranteed, current data suggests XRP may be approaching a phase where downside risk is gradually easing relative to potential upside.
For long-term investors, the recent surge in realized losses could signal not just caution, but the early stages of a possible recovery.
Conclusion
XRP’s surge in realized losses highlights intense market fear, but historically, extreme pessimism often signals a price floor.
With weaker hands mostly gone, even modest buying could spark a rebound. Tracking realized profit & loss offers investors a strategic lens into sentiment extremes and potential turning points.
