XRP Price Decline Signals Major Losses

What to Know:

• XRP’s on-chain profitability has turned negative, signaling potential capitulation as holders realize significant losses.
• The broader context involves a prolonged price decline since August 2025, exacerbated by increased spending from long-term holders.
• This situation could impact XRP’s liquidity and market structure, with $2 identified as a critical psychological level for holders.

XRP, the cryptocurrency associated with Ripple, has experienced a challenging period, marked by a sustained price decline and shifting on-chain dynamics. Data indicates that XRP holders are increasingly spending their coins at a loss, contributing to downward pressure on the asset. This behavior has raised concerns about potential capitulation and the overall health of the XRP market.

On-Chain Profitability Flips Negative

Recent data from Glassnode reveals that XRP’s Spent Output Profit Ratio (SOPR) has fallen below 1, indicating that on-chain profitability has turned negative. This metric suggests that, on average, XRP holders are selling their coins at a loss. Analysts have drawn parallels to the period between September 2021 and May 2022, when a similar SOPR decline preceded a period of consolidation. The current situation may signal an upcoming stabilization phase for XRP.

Long-Term Holders Drive Selling Pressure

Since August 2025, XRP’s price has been in a consistent downtrend, prompting long-term holders to increase their spending. Specifically, holders who accumulated XRP before November 2024 increased their spending by 580%, from $38 million per day to $260 million per day. This surge in spending suggests that experienced traders are exiting their positions, adding to the selling pressure on XRP.

Supply in Profit Reaches Multi-Month Low

As XRP’s price declined, the proportion of the total supply in profit plummeted to 58.5%, marking the lowest level since November 2024. This indicates that a significant portion of XRP holders are currently underwater on their investments. The situation highlights the fragility of the market structure and the potential for further downside if selling pressure continues.

Psychological Support at $2 Under Pressure

The price of XRP has fallen below $2, a level that has historically acted as a psychological support zone for holders. Each retest of $2 has resulted in investors realizing substantial losses, ranging from $500 million to $1.2 billion per week since the beginning of the year. This persistent selling pressure underscores the importance of this level and its potential impact on future price movements.

Capitulation vs. Structural Failure

The recent price action has sparked debate about whether XRP is undergoing a capitulation event or experiencing a more fundamental structural failure. Some analysts argue that the current situation is more indicative of capitulation, citing stronger market fundamentals compared to previous downturns. The key difference is the presence of regulatory clarity, which did not exist in 2022.

Related: XRP Capitulation? Bitcoin Targets $64K

Source: Original article