XRP just recorded its biggest weekly increase in realized losses since 2022, a sign that panic selling may have reached an extreme.
On-chain data shows approximately $1.93 billion in realized losses in a single week, meaning the coins moved to prices below their original purchase levels. The last time losses of that magnitude were recorded, about 39 months ago, XRP rose 114% over the next eight months.
Realized losses measure actual losses, not paper reductions. They spike when holders capitulate and choose to lock in losses rather than wait for a rebound. Unlike unrealized losses, which can disappear if the price recovers, realized losses represent final decisions.
That absorption piece matters.
For realized losses to reach billions, there must be aggressive selling pressure, but there must also be buyers willing to take the other side. Large capitulation events often coincide with the arrival of liquidity at lower levels. Historically, these moments tend to cluster near market lows because much of the weaker positioning is wiped out in a single move.
When weak hands are eliminated, the composition of the holders changes. Coins that change hands during capitulation typically move from emotionally driven short-term traders to long-term buyers with stronger convictions or better cost bases. That redistribution can create a more stable base for prices.
However, context is key. The 2022 peak came after a prolonged decline and broader crypto deleveraging. The current environment includes macroeconomic uncertainty, changing regulatory narratives, and still elevated volatility among major companies. A realized peak loss increases the likelihood that sellers are exhausted, but does not eliminate macroeconomic headwinds.
Another variable to take into account is monitoring. In previous cycles, sustained recoveries required not only a simple print of capitulation, but also the stabilization of spot demand and a easing of selling pressure in the following weeks. If realized losses remain high or rapidly accelerate again, that would suggest that the distribution is not over.
For now, the data points to emotional extremes. Historically, that has been fertile ground for rebounds. Whether it becomes a lasting reversal depends on what happens after the panic subsides.
