Biggest Loss in 3 Years—Is XRP Signaling a Bottom?

▲ XRP / ChatGPT-generated image ©

As realized losses among XRP (Ripple) investors have surged to their highest level in three years, analysts suggest that a rebound similar to past rallies could be on the horizon.

According to cryptocurrency media outlet Bitcoinist on February 22 (local time), on-chain analytics firm Santiment reported that XRP’s realized losses recently reached their highest level in nearly four years. Over the past week, total realized losses were estimated at approximately $908 million.

Realized losses refer to losses confirmed when investors sell coins at prices lower than their purchase price. Santiment explained that periods of large-scale realized losses typically coincide with extreme market fear. When fear peaks, “weak hands” tend to exit the market, and as selling pressure becomes exhausted, the likelihood of a price rebound increases.

Historical cases support this view. After weekly realized losses surged to $1.93 billion in 2022, XRP’s price climbed more than 114% over the following eight months. Extreme loss phases effectively acted as signals of a bottom formation. While Santiment noted that this does not guarantee an immediate sharp rally, it believes the conditions are forming that could raise the probability of a rebound.

However, it was also mentioned that during the 2023 rally, Ripple’s partial legal victory in its lawsuit against the U.S. Securities and Exchange Commission (SEC) played a contributing role. Currently, XRP is trading near $1.4 after falling to the $1.1 range in early February, standing at around $1.39 at the time of writing.

If the price were to rise more than 100% from current levels, a recovery to around $3 could be possible. The market is closely watching whether this latest surge in realized losses will once again signal the formation of a bottom.

Disclaimer: This article is for investment reference purposes only and we are not responsible for any investment losses arising from it. The content should be interpreted solely for informational purposes.