Here’s Why The XRP Price Has Been In A Consistent Downtrend Since 2025

Overview

Recent on-chain data from Glassnode has shed light on the ongoing downtrend of XRP’s price, which has persisted since 2025. After reaching a peak above $3, XRP has faced continuous declines, reflecting broader market weaknesses and shifts in investor sentiment.

Reasons Behind the Downtrend

The analysis from Glassnode indicates that the decline in XRP’s price can be attributed to a significant shift in investor behavior. This shift has been driven by weakening on-chain profitability and an increase in losses among holders. The data reveals that XRP’s price has fallen below the aggregate holder cost basis, which is the average price at which current investors acquired their tokens. When a cryptocurrency trades below this level, many holders find themselves technically underwater, meaning they are holding at a loss. This situation can trigger panic selling as investors aim to limit further losses, thereby increasing selling pressure and reinforcing the ongoing downtrend.

A crucial indicator that supports this analysis is the Spent Output Profit Ratio (SOPR), which is calculated using a seven-day Exponential Moving Average (EMA). The SOPR measures whether coins being transacted on the blockchain are being sold at a profit or a loss. According to Glassnode’s findings, XRP’s SOPR has dropped from approximately 1.6 in July 2025 to around 0.96 recently. A value above 1 indicates that holders are selling at a profit, while a value below 1 suggests that coins are being sold at a loss. The sustained movement below this neutral level points to a scenario where most of the selling activity for XRP is occurring at a loss, rather than from profit-taking.

Consequently, the on-chain profitability for XRP holders has turned negative. This negative environment tends to undermine investor confidence in the cryptocurrency and diminishes the motivation to hold it, particularly among short-term traders. Furthermore, negative profitability can deter new capital inflows, as potential buyers perceive limited signs of recovery or upward momentum, which can exacerbate price declines or stagnation.

Market Structure Comparison

Interestingly, Glassnode has noted that XRP’s current market structure bears a striking resemblance to the period between September 2021 and May 2022. During that earlier phase, XRP’s SOPR also fell below 1 and remained there for an extended duration. This earlier period was characterized by prolonged consolidation and low volatility following sharp declines, before the market eventually stabilized. This historical comparison suggests that XRP may be undergoing a similar structural phase, where losses dominate trading activity and recovery remains elusive until selling pressure diminishes and sentiment shifts back to a positive outlook.

As of the latest updates, XRP’s price has further declined, trading below $1.4. Data from CoinMarketCap indicates that the cryptocurrency has experienced a significant drop of more than 4.3% over the past 24 hours and has plummeted by over 46% year to date.

From author

The analysis of XRP’s current price trajectory highlights the challenges faced by the cryptocurrency in a shifting market landscape. As investor sentiment continues to wane and on-chain metrics reflect losses, the path to recovery appears fraught with obstacles. Understanding these dynamics is crucial for stakeholders looking to navigate the complexities of the crypto market.

Impact on the crypto market

• XRP’s prolonged downtrend reflects broader vulnerabilities in the cryptocurrency market, emphasizing investor sentiment’s critical role.
• The negative profitability signals may deter potential new investors, which can lead to further stagnation in the market.
• The historical market structure comparison may provide insights into potential future movements, indicating that recovery could take time.
• Increased selling pressure from underwater holders may contribute to a bearish sentiment across other cryptocurrencies, as traders reassess their positions.
• The observed correlation between XRP’s price movements and market behaviors could influence trading strategies, particularly for short-term traders.