XRP Triggers Panic Selling as Key On-Chain Metric Flips Bearish, Echoing 2021–2022 Consolidation

XRP Enters High-Stress Phase as On-Chain Data Shows Holders Selling at a Loss

XRP is facing renewed market pressure after on-chain data revealed that the token has lost its aggregate holder cost basis, a development that historically coincides with heightened selling activity and increased investor anxiety. The shift has pushed key profitability metrics into negative territory, triggering what analysts describe as panic-driven selling among some holders.

The data was highlighted by blockchain analytics firm Glassnode and later confirmed through information shared by Cointelegraph, which has been cited by the hokanews editorial team in its reporting on current XRP market conditions.

Source:XPost

SOPR Signals a Shift Into Loss Territory

At the center of the latest concern is XRP’s Spent Output Profit Ratio, or SOPR, a widely used on-chain indicator that measures whether coins are being sold at a profit or at a loss. According to the data, XRP’s SOPR has fallen sharply from around 1.16 to 0.96.

A SOPR reading above 1 indicates that, on average, holders are selling their tokens at a profit. When the metric drops below 1, it suggests that coins are being sold at a loss. Analysts view this threshold as psychologically important, as it often marks a transition from confidence-driven selling to stress-driven liquidation.

The current move below 1 suggests that a significant portion of XRP holders are now exiting positions at prices lower than their average acquisition cost.

Loss of Aggregate Cost Basis Raises Alarm

Beyond SOPR, Glassnode data shows that XRP has lost its aggregate holder cost basis. This means the market price has fallen below the average price at which current holders acquired their tokens.

Historically, this condition has been associated with elevated selling pressure, particularly from shorter-term or less conviction-driven investors. When prices fall below cost basis, fear of further losses can prompt holders to sell defensively, even if long-term fundamentals remain unchanged.

Market analysts note that this dynamic often creates a feedback loop, where selling pushes prices lower, reinforcing negative sentiment.

Echoes of the 2021–2022 Consolidation Phase

Glassnode analysts have drawn comparisons between the current XRP setup and the prolonged consolidation period that followed the September 2021 peak and extended into May 2022. During that time, XRP traded below key cost basis levels for months, with SOPR frequently dipping below 1.

That earlier phase was marked by sideways price action, repeated attempts at recovery, and gradual redistribution of supply from weaker hands to longer-term holders. While the period was challenging for traders, it ultimately helped establish a more stable base before broader market shifts occurred.

The resemblance has led some analysts to suggest that XRP may be entering a similar consolidation phase rather than an immediate breakdown.

Panic Selling Versus Structural Reset

Despite the alarming signals, analysts caution against interpreting the data as purely bearish. Selling below cost basis often represents capitulation, where emotional selling exhausts weaker holders.

From a market structure perspective, such phases can serve as resets. As panic selling subsides, remaining holders tend to have stronger conviction, reducing downside volatility over time.

This does not guarantee an immediate recovery, but it can lay the groundwork for stabilization if broader market conditions improve.

Broader Market Context Matters

XRP’s on-chain stress is unfolding amid a mixed crypto market environment. While some major assets have shown resilience, others are experiencing renewed volatility as traders reassess risk and liquidity conditions.

Macro factors, including interest rate expectations and shifts in speculative capital, continue to influence sentiment across digital assets. In this context, XRP’s decline below cost basis may reflect broader risk-off behavior rather than asset-specific weakness alone.

Analysts emphasize that on-chain signals should be interpreted alongside macro and technical indicators rather than in isolation.

Investor Psychology Takes Center Stage

The drop in SOPR highlights the psychological dimension of crypto markets. Selling at a loss is often driven by fear rather than fundamentals, especially during periods of uncertainty.

Historically, markets tend to punish emotional decision-making while rewarding patience. However, timing remains critical, and prolonged periods below cost basis can test even experienced investors.

This tension between fear and conviction is a defining feature of consolidation phases in digital asset markets.

Media Confirmation and Reporting Context

The analysis linking XRP’s SOPR decline and loss of cost basis to panic selling was confirmed by Cointelegraph and subsequently cited by hokanews. In line with standard media practice, hokanews referenced the confirmation while providing independent interpretation and broader market context.

Such attribution ensures transparency while allowing for balanced reporting rather than reliance on a single data source.

What Traders Are Watching Next

Market participants are now closely monitoring whether XRP’s SOPR can recover back above 1, a move that would indicate a return to profit-taking rather than loss realization.

Analysts are also watching for signs of declining sell pressure, such as reduced volume during down moves or stabilization around key technical support levels.

If selling pressure continues, XRP could remain in a consolidation range for an extended period. If panic selling subsides, however, the market may begin forming a base.

Long-Term Implications

Periods where assets trade below aggregate cost basis often play an important role in long-term market cycles. They help redistribute supply, reset expectations, and clear excess leverage or speculation.

While uncomfortable in the short term, such phases have historically preceded stronger recoveries once sentiment and macro conditions improve.

For XRP, the current on-chain signals suggest a market under stress, but not necessarily one without a path forward.

Conclusion

XRP has entered a high-pressure phase as on-chain data shows the token trading below its aggregate holder cost basis, with SOPR dropping from 1.16 to 0.96. The move has triggered panic selling and echoes the prolonged consolidation seen between September 2021 and May 2022.

Confirmed by Cointelegraph and based on data from Glassnode, the development highlights the psychological and structural challenges facing XRP holders. Whether this phase leads to deeper losses or a gradual reset will depend on how selling pressure evolves and how broader market conditions unfold.

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Writer @Ethan
Ethan Collins is a passionate crypto journalist and blockchain enthusiast, always on the hunt for the latest trends shaking up the digital finance world. With a knack for turning complex blockchain developments into engaging, easy-to-understand stories, he keeps readers ahead of the curve in the fast-paced crypto universe. Whether it’s Bitcoin, Ethereum, or emerging altcoins, Ethan dives deep into the markets to uncover insights, rumors, and opportunities that matter to crypto fans everywhere.

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