🔥 Key Takeaways
- Glassnode data reveals XRP’s on-chain cost basis structure mirrors the setup from February 2022, which preceded a significant 60% price correction.
- Short-term holders (newer wallets) are currently holding XRP at a cost basis lower than long-term holders (6-12 months), creating a fragile market structure.
- Despite $1.37 billion in inflows to XRP ETFs since November, exchange balances have increased this month, suggesting potential selling pressure.
- XRP is currently trading around $1.93, struggling below major moving averages, reinforcing the bearish technical outlook.
Glassnode Issues Warning: XRP Echoes 2022 Crash Setup
Leading on-chain analytics firm Glassnode has issued a cautionary signal for XRP investors, pointing to structural similarities between the current market conditions and the pre-crash setup observed in February 2022. At that time, XRP experienced a sharp decline of approximately 60%. The warning centers on the relationship between short-term and long-term holders, a key metric for assessing market conviction.
The Cost Basis Conundrum
The core of Glassnode’s analysis lies in the “Realized Price” and cost basis distribution. Currently, newer wallets—often representing speculative short-term holders—are holding XRP at a cost basis that is undercutting that of longer-term holders (those holding for 6 to 12 months).
This inversion is historically significant. When short-term holders buy in at higher prices but the market price drops below their entry point, while long-term holders remain in profit, it creates “supply overhead.” This means there is a dense cluster of investors sitting on losses who may look to sell at breakeven, creating heavy resistance levels and increasing the likelihood of further downside if selling pressure mounts.
ETF Inflows vs. Rising Exchange Balances
A conflicting narrative is currently playing out in the broader XRP market. Institutional interest appears strong, with XRP ETFs accumulating $1.37 billion in inflows since November. Typically, such inflows are viewed as a bullish catalyst, signaling accumulation by larger entities.
However, this institutional demand is being offset by a worrying on-chain metric: exchange balances have risen this month. An increase in tokens held on exchanges typically signals an intent to sell rather than hold long-term in cold storage. This divergence suggests that despite ETF accumulation, there is significant selling pressure from retail or other holders looking to exit, potentially neutralizing the bullish impact of the ETF inflows.
Technical Outlook: Below Key Averages
The on-chain warnings are being validated by price action. XRP is currently trading near $1.93, a critical psychological and technical level. The asset is facing rejection below major moving averages (MAs), indicating that the path of least resistance remains downward.
Traders are now watching to see if XRP can reclaim these moving averages to invalidate the bearish setup. Failure to do so could confirm the structural similarities to 2022, potentially triggering the cascading sell-off that Glassnode’s data hints at.