XRP Capitulation Signal: Holders Realize Major Losses Amid Panic Selling

The most telling indicator of the current distress in the XRP market is the Spent Output Profit Ratio (SOPR). Data from the on-chain analytics firm Glassnode shows this critical metric has flipped from positive to negative, falling from 1.16 on July 25, 2025, to 0.96. An SOPR below 1 signifies that, on average, coins are being spent at a loss. This current setup is a stark echo of the period from September 2021 to May 2022, when XRP’s SOPR also languished below 1, a phase that preceded a prolonged consolidation and eventual stabilization for the Ripple Network’s native asset.

The depth of the loss realization is further quantified by the share of XRP supply in profit, which plummeted to 58.5% by mid-November. This marked the lowest level since November 2024, when XRP was trading at just $0.53. The alarming context is that in mid-November 2025, XRP was trading around $2.15—approximately four times higher than its price a year prior. The fact that over 41% of the coin’s supply was still held at a loss at that elevated price point reveals a market that became top-heavy and structurally fragile, dominated by late buyers who entered at higher valuations.

The behavior of long-term holders has been a primary driver of the selling pressure. Since August 2025, as XRP’s price entered a steady decline, these seasoned investors—who had accumulated their positions before November 2024—dramatically increased their spending. Their daily sell volume surged by 580%, from $38 million per day to a staggering $260 million per day, with these elevated levels persisting into early November.

Analysts noted this spending spree was fundamentally different from historical patterns. Typically, large waves of selling by long-term holders coincide with price rallies, as they take profits. The current scenario, however, is a clear distribution into weakness. This indicates that experienced traders are not merely booking gains but are exiting positions altogether, adding sustained downward pressure on XRP’s price. This shift from profit-taking to loss-cutting is a hallmark of capitulation.

A critical psychological and technical battleground has emerged at the $2 price level for XRP. Each time the asset has retested this zone, it has triggered massive realized losses across the market. Since the beginning of the year, investors have realized between $500 million and $1.2 billion in losses per week during these $2 retests. The intensity of this pain peaked in mid-November when the price finally broke below $2, causing the 30-day estimated market average of daily realized losses to surge to $75 million.

The breach of this critical support has had severe consequences. At the time of writing, XRP was trading at $1.40. This price represents a fall below the aggregate holder cost basis—the average price at which all current holders purchased their coins. Falling beneath this level is a key trigger for panic selling, as a majority of the market’s participants are now underwater on their investments, explaining the frantic exit of capital witnessed in recent weeks.

The extreme price action and on-chain distress have raised a pivotal question for the XRP market: is this a capitulation event that typically forms a market bottom, or is it indicative of a deeper structural failure? Many experts lean toward the capitulation thesis, drawing a crucial distinction from the bear market of 2022. They argue that the fundamental backdrop for the Ripple Network and XRP is stronger today, primarily due to greater regulatory clarity that was absent in the previous cycle.

The historical precedent from 2021-2022, where a sub-1 SOPR was followed by consolidation and stabilization, supports the idea that the current panic may be exhausting itself. While the scale of realized losses is significant and the break of key support levels is concerning, the pattern of long-term holder distribution and negative on-chain profitability aligns more with a capitulation phase than a permanent breakdown. The market’s next moves will depend on whether this wave of panic selling fully flushes out weak hands, setting the stage for a new equilibrium.