XRP Price Alert: Ominous Signal Flashes, Echoing 68% Collapse Pattern

In a development rattling cryptocurrency markets, XRP is flashing a critical on-chain warning signal that historically preceded a devastating 68% price collapse. This pattern, emerging in early 2025, mirrors the market structure observed in February 2022, raising urgent questions about the digital asset’s near-term trajectory and the resilience of its key support levels.

XRP Price Faces a Critical Historical Echo

Market intelligence from Glassnode reveals a concerning parallel in XRP’s underlying blockchain data. The current configuration of investor cost-basis—the average price at which coins were acquired—closely resembles the setup witnessed in February 2022. Subsequently, XRP embarked on a prolonged downtrend, plummeting from $0.78 to a low of $0.30 by June of that year, representing a staggering 68% drawdown. This historical precedent now casts a long shadow over the current price action, suggesting that the market’s foundational support structure may be weakening.

The core issue lies in the behavior of different investor cohorts. Data indicates that investors who bought XRP within the last one week to one month are now accumulating at prices below the average cost basis of those who bought between six months and one year ago. Consequently, this creates a scenario where newer, short-term holders are in profit, while mid-term holders sit on unrealized losses. This dynamic generates persistent overhead selling pressure, as the latter group may look to exit at breakeven. Glassnode analysts emphasize that as this structure persists, significant psychological pressure builds on those who bought at higher prices, potentially forcing capitulation if key levels fail.

The $2.00 Zone: A Make-or-Break Psychological Level

The $2.00 price point has transformed into the most critical battleground for XRP bulls and bears. Analysis shows that each retest of this level since early 2025 has triggered massive realized losses, ranging from $500 million to $1.2 billion on a weekly basis. This data underscores how powerfully this price influences holder behavior, acting as a trigger for profit-taking or loss-cutting. When the price sustains below $2.00, pressure intensifies on holders who acquired XRP at higher valuations, while newer buyers may accumulate at lower levels, further entrenching the bearish cost-basis structure.

A historical fractal reinforces the immense importance of this support. Previously, the $0.55 level served a similar function, providing support from April 2021 through May 2022. However, each successive retest weakened the support until it finally broke, leading to a 48% decline. If the $2.00 support suffers a similar fate, technical analysis suggests a downward spiral could ensue, with a potential bottom forming near the 200-week moving average, currently around $1.03. The breakdown below the 50-day Simple Moving Average (SMA) at $2.00 has already signaled a shift in momentum, with analysts now eyeing downside risk extending toward the $1.25 region.

Spot ETF Outflows Amplify Bearish Sentiment

Compounding the technical and on-chain warnings, the nascent spot XRP Exchange-Traded Fund (ETF) market recorded a significant bearish event. On Tuesday, these funds experienced their second day of net outflows since launch, with a total of $53.32 million leaving the products, according to data from SoSoValue. This figure marks the largest single-day outflow to date, surpassing the $40 million outflow recorded on January 7. These movements signal caution or profit-taking among institutional investors and large-scale participants.

Such outflows directly contribute to sell-side pressure in the underlying market, as ETF issuers may need to sell XRP holdings to meet redemption requests. This institutional behavior often reflects broader risk-off sentiment within the crypto asset class or specific concerns about XRP’s outlook. The convergence of ETF outflows with the deteriorating on-chain structure presents a multifaceted challenge for the asset, indicating weakness from both the retail/on-chain and institutional sides of the market.

Analyzing the Path Forward for XRP

For the bearish scenario to be invalidated, XRP bulls must orchestrate a strong recovery to reclaim and consolidate above the $2.00 threshold. A sustained move above this level would help alleviate the overhead pressure from mid-term holders and potentially disrupt the negative cost-basis dynamic. Furthermore, a reversal in ETF flow data, shifting back to consistent net inflows, would be a crucial signal of returning institutional confidence.

Market participants are also closely monitoring broader regulatory developments, particularly from the U.S. Securities and Exchange Commission (SEC), as these can have an outsized impact on XRP’s market sentiment. The interplay between technical levels, on-chain metrics, ETF flows, and external regulatory news will likely determine whether XRP faces a repeat of the 2022 downturn or manages to stabilize and forge a new path. The immediate focus remains squarely on the defense of the $1.80 to $2.00 support zone.

Conclusion

The convergence of a bearish on-chain signal, significant spot ETF outflows, and the breach of key technical support presents a serious challenge for the XRP price. The eerie resemblance to the February 2022 setup, which preceded a 68% collapse, serves as a stark warning for investors. While history does not repeat itself exactly, the underlying market mechanics of investor psychology and cost-basis pressure are flashing red. The battle for the $2.00 level is now paramount; its outcome will likely dictate whether XRP experiences a deeper correction toward $1.10 or stages a resilient recovery. All market participants are advised to monitor these developments closely, recognizing the heightened volatility and risk in the current environment.

FAQs

Q1: What is the bearish signal that XRP is currently flashing?
The signal is a specific on-chain cost-basis structure where newer (1W-1M) investors are buying below the average price of mid-term (6M-12M) holders. This same structure preceded a 68% price drop in 2022.

Q2: Why is the $2.00 price level so important for XRP?
The $2.00 level is a major psychological and technical support zone. Each time XRP has retested it in 2025, it has triggered between $500 million and $1.2 billion in weekly realized losses, proving to be a critical point where holders decide to sell.

Q3: What do the XRP ETF outflows mean?
Net outflows from spot XRP ETFs mean more money is being withdrawn from these funds than invested. This suggests institutional caution or profit-taking, which adds selling pressure to the market as ETF providers may need to sell XRP to return cash to investors.

Q4: How low could the XRP price go if support breaks?
If the $1.80-$2.00 support zone fails, analysis suggests a deeper correction could target the 200-week moving average near $1.03, similar to the fractal pattern observed after the $0.55 support broke in 2022.

Q5: What needs to happen for the XRP price to recover?
For a recovery, bulls need to reclaim and hold above the $2.00 level to break the negative cost-basis pressure. A sustained shift to net inflows for XRP spot ETFs would also be a strong positive signal for renewed institutional demand.