XRP Suffers Biggest Losses Since 2022—Is This the Real Bottom?

▲ XRP ETF/ChatGPT-generated image ©

XRP (Ripple) fell below $1.40 amid unprecedented panic selling by retail investors, but institutional investors have instead used the dip as a buying opportunity, highlighting a stark contrast in market sentiment. Historically, such extreme sell-offs have signaled market bottoms ahead of explosive rebounds, fueling optimism that, together with potential legislative catalysts, a mid- to long-term bullish rally could unfold.

According to investment media outlet FXEmpire on February 23 (local time), XRP plunged to around $1.38 over the weekend as retail investors rushed to liquidate positions amid a broader market downturn that saw Bitcoin (BTC) fall near $60,000. Data from market analytics platform Santiment showed that XRP’s on-chain realized losses reached their highest level since 2022. This suggests that many investors capitulated in extreme fear, selling their coins below their purchase prices.

Ironically, surges in large-scale realized losses have historically served as strong indicators of market bottoms. Santiment cited a similar event 39 months ago, after which XRP soared 114% over the following eight months, noting that once selling pressure is exhausted, even modest buying demand can trigger sharp price rebounds. In contrast to retail panic selling, U.S.-listed XRP spot ETFs recorded $1.84 million in inflows last week, extending their streak of net inflows to three consecutive weeks. This stands in stark contrast to Bitcoin spot ETFs, which have seen significant outflows for five straight weeks, underscoring solid institutional demand for XRP.

Market experts expect the U.S. cryptocurrency market structure bill, known as the Clarity Act and anticipated to pass this spring, to serve as a key catalyst boosting XRP’s utility and adoption. In the short term, however, a cautious bearish structure remains intact, with XRP down 5% year-to-date and potentially vulnerable to a drop toward the $1 level. Nevertheless, if steady inflows into spot ETFs continue and optimism surrounding the bill’s passage grows, a mid- to long-term bullish scenario could see XRP reach $2.50 within four to eight weeks and $3 within eight to twelve weeks.

Still, notable downside risks threaten this optimistic outlook. Geopolitical military conflict between the United States and Iran, fading expectations of Federal Reserve rate cuts, or delays in passing the Clarity Act could push XRP below its short-term $1 target at any time. In particular, signals from the Bank of Japan suggesting a potential hike in neutral rates could narrow the interest rate gap between the U.S. and Japan, potentially triggering a large-scale unwinding of yen carry trades and rapidly draining market liquidity.

Currently, XRP is trading below both its 50-day and 200-day exponential moving averages (EMAs), technically placing it on the brink with dominant selling pressure. To break the downtrend and shift into an uptrend, XRP must decisively overcome the psychological resistance at $1.50 and climb above its 50-day EMA. Investors are closely watching whether XRP can defend the critical $1 support level and, backed by institutional capital, begin a rebound amid turbulent macroeconomic conditions, including geopolitical tensions in the Middle East and tariff policies under President Donald Trump.

Disclaimer: This article is for investment reference only and we are not responsible for any losses resulting from investment decisions based on it. The information provided should be interpreted solely for informational purposes.