XRP is entering a trajectory where on-chain cost basis, leverage and flow data may be more important than broad market narratives.
The token is approaching a critical point after a sharp increase in realized losses, with on-chain activity showing investors moving coins below their purchase price.
That’s a classic capitulation signal. It often seems like an emotional low point, when weaker holders get out and the offering changes hands. It can mark the beginning of a recovery, but also the start of a longer recovery cycle.
The capitulation is visible, but in itself it is not a low point
Santiment’s weekly realized profit and loss data shows that XRP has posted the largest spike in realized losses since the November 2022 breakout.
The chart below shows that the previous weekly milestone was approximately negative 1.93 billion in realized losses, followed by a 114% price increase over the next eight months.
It is striking that the current episode of realized losses is approximately -908 million.
That means a large cohort of holders sold or transferred coins below their cost base, tying up on-chain losses.
This represents the kind of print traders that are on the lookout late in a correction.
Capitulation events can eliminate excess supply by displacing weakly held positions, especially after a prolonged downturn.
They often cluster around periods of maximum frustration, when the price has already done enough damage to force investors into defensive decisions.
Cost basis is now the line that separates reset from weakness
Glassnode’s cost basis statistics Draw a clear line under the current market structure of XRP.
On February 23, the realized price of XRP, which serves as a proxy for the total average price paid for the circulating supply, was around $1.45.
This level is important because it acts as a dividing line between expansion and contraction.
When spot transactions are below the realized price, the market is on average under water. When the spot market recovers and remains above, the market often enters a healthier phase.
XRP is struggling to regain and maintain that level.
Two other Glassnode metrics support the same reading. MVRV is around 0.99, which indicates that the asset is valued roughly at its cost basis, or slightly below. SOPR is around 0.98, indicating that on-chain coins are sold at a loss on average.
A sustained SOPR lower than 1 typically reflects stress behavior and not confident rotation.
This is the core setup.
If XRP reclaims the realized price of around $1.45 and holds there, the market could begin to reset.
In that scenario, an SOPR that gets back above 1 and stays there would show that holders are no longer using rallies to exit the market at a loss. If the MVRV goes above 1, it would reinforce that the market has left the underwater zone.
If XRP fails to stay above the realized price, the opposite dynamic could continue. Holders who purchased a higher value use strength to reduce exposure, and the token remains captured below the total cost base.
Leverage is still high and Binance’s inflow adds a second risk signal
Derivatives positioning remains an important part of the story, as does CoinGlass facts shows that leverage is still high enough to shape XRP’s next step.
CoinGlass lists XRP futures open interest at approximately $2.33 billion, with a 24-hour futures volume of approximately $5.24 billion. It also shows approximately $13.2 million in XRP futures liquidations over 24 hours.
Those are not small numbers. They show that leverage is still active and positioning can still magnify price movements in either direction.
The broader setup remains defensive, with bearish financing indicating shorts paying long positions. This is important because two very different paths emerge from the same starting point.
If XRP stabilizes near its cost base and starts moving higher, short positioning could become squeeze fuel.
In a fragile market, even a modest spot-led move can trigger short covering, accelerate upward movement and quickly improve market tone.
However, if XRP continues to move lower while leverage remains high, the same structure can increase downside volatility. Liquidation cascades can occur, and that can push the market further away from a clean reset.
Meanwhile, the spot alternating currents also provide a short-term warning flag.
CryptoQuant facts showed that more than 31 million XRP moved to Binance in a single day, with the largest cohorts of holders accounting for the majority of the activity.
Wallets holding 100,000 to 1 million XRP sent 14,236,825 XRP, while wallets holding more than 1 million XRP sent 14,494,865 XRP.
Smaller cohorts accounted for the rest, with 2,938,809 XRP from 10,000 to 100,000 XRP wallets, 73,630 XRP from 1,000 to 10,000 XRP wallets, and 6,543
All told, the inflow was estimated at nearly $45 million in potential selling pressure.
However, it should be noted that not every currency inflow translates into immediate sales. Some transfers are linked to collateral, internal portfolio changes or execution planning.
Still, in a weak market, a sudden increase in exchange-bound supply, especially from larger cohorts, is a signal that traders keep a close eye on.
If that pattern continues, it could delay any rebound attempt, even after a capitulation.
XRP ETF flows are still positive, but momentum has slowed sharply
ETF positioning remains relevant for XRP, but the story now is about the marginal bid, not the upside.
CryptoRank data shows that the broader ETF backdrop has been weak, with BTC ETFs losing $7.2 billion and ETH funds losing $2.8 billion since November, with most weeks negative.
This partly explains the risky tone in crypto and the limited follow-up in altcoins.
XRP’s ETF profile has deviated from that trend, at least in direction.
Data from CryptoRank indicates that XRP ETFs entered this drawdown and have remained net positive every month since their debut.
That’s important because it suggests there is still demand for regulated XRP products, even while the broader market has been under pressure.
However, the pace has slowed considerably.
XRP ETF monthly inflows fell from $667 million to $49 million. The category has not yet had a red month, but the slowdown is significant.
That leaves XRP in the middle, where ETF demand is still supportive at the margin but not strong enough on its own to overpower a weak tape.
This is also why the next phase for XRP is less about whether ETF products exist and more about whether they continue to attract enough capital to matter during periods of low liquidity.
After capitulation, even modest inflows can have an outsized impact if supply overhead has already been reduced.
If these inflows decline further, the market may need to see demand from other channels to regain and maintain its cost base.
Bottom line: ETF positioning is still part of the scheme, but is no longer a standalone bullish argument.
The next month will decide whether XRP resets or enters a longer repair phase
XRP’s setup can now be framed into three scenarios, all related to the same market signals.
The first is a washout-to-rebase recovery. In this case, the peak of realized loss acts as a supply reset, stabilizing XRP near its cost base, then clawing back and consolidating above the realized price of around $1.45.
Confirmation would come if SOPR were to get back above 1 and stay there, with leverage normalizing rather than expanding aggressively. If shorts remain busy while the spot improves, a squeeze becomes plausible.
The second is an underwater grind. Here capitulation marks the beginning of a longer recovery process, and not the end of the correction.
XRP fails to stay above the realized price, SOPR remains below 1, and MVRV remains below 1. Rallies are sold by underwater holders trying to reduce exposure, and the price remains capped.
The third is a flow-driven repricing. On this path, demand for ETFs remains positive and becomes more important after the capitulation reduces supply pressure. Even a modest inflow can be important if the market is already tight.
The first sign would be if product flows remain positive or rise while the XRP price is still flat, which could indicate that demand is arriving before the price responds.