Glassnode Alerts: XRP’s Current Structure Echoes Pre-Crash Patterns from February 2022

Blockchain analytics firm Glassnode has raised concerns, noting that XRP's on-chain market structure closely resembles the same cost-basis configuration seen just prior to a significant 60% price drop in 2022.

Key Takeaways

Market Structure Alert: XRP’s on-chain structure mirrors patterns seen before a major price crash in February 2022.
Cost Basis Dynamics: New wallet holders are accumulating XRP below the cost basis of longer-term holders, creating potential overhead supply.
Critical Price Points: The $2.00 level acts as a significant behavioral threshold, with essential support at $1.80.
ETF Impact: XRP ETFs have garnered substantial inflows, yet drawdowns continue, showcasing the complex market dynamics at play.

As of now, XRP is trading at $1.91, reflecting a decline of 4.74% over the last 24 hours.

Understanding XRP’s Current Market Conditions

The main focus of Glassnode’s analysis is the cost basis for XRP holders. Wallets that have been active within the past week to month are buying XRP at prices lower than those held by investors who have had their tokens for six months to a year. This means newer buyers are entering the market at lower prices while older, mid-term holders are facing losses or are just breaking even.

This scenario can create an overhead supply. When the market price nears the cost basis of the mid-term holders, they may be inclined to sell to minimize their losses during any price rally. A similar situation occurred in February 2022: XRP surged from $0.60 to $0.88 initially but then plummeted by 60%, hitting $0.30 by mid-year due to the Terra ecosystem crisis and worsening macroeconomic conditions.

The $2.00 Behavioral Threshold

Glassnode has pinpointed the $2.00 mark as a crucial threshold above the technical level. Their analysis indicates that since early 2025, each time XRP neared $2.00, holders would incur between $500 million and $1.2 billion in weekly realized losses as they sold off their assets.

XRP managed to briefly breach $2.40 at the start of January, gaining 25% within a week, but has since fallen back below the $2.00 mark. This decline has been reflected in the moving averages, as the token now trades below its 20-, 50-, 100-, and 200-day averages, hinting at downward momentum.

Signs of Positive Inflows

Despite these setbacks, there are encouraging developments. Since the introduction of XRP ETFs in November 2025, they have seen a combined total of $1.37 billion in inflows. Remarkably, there were 35 consecutive days without any outflows, though a minor redemption of $40.8 million occurred on January 7. The total assets under management (AUM) for these ETFs are nearing $2 billion, with over 788 million XRP currently held in custody.

Additionally, XRP’s exchange reserves have dwindled from 3.76 billion in early October 2025 down to approximately 1.6 billion by late December—the lowest level since 2018. As ETF purchases necessitate buying on the spot market, tokens are effectively removed from circulation—tightening supply.

However, these inflows have not wholly shielded XRP from decline. The currency experienced a 15% drop in December, despite substantial institutional purchase activity. Exchange balance data reveals that since the start of January, around 206 million XRP, valued at about $430 million, have been moved to exchanges, indicating a tendency toward distribution.

Market Outlook and Considerations

The similarities between the current market conditions and those of February 2022 prompt a pertinent question: Can the absorption of supply driven by ETF investments counter the capitulation pressures identified by Glassnode? Unlike in February 2022, the market now has active institutional players. Five significant issuers—Canary Capital, Bitwise, Franklin Templeton, Grayscale, and 21Shares—are backing pension funds and endowments. Their ongoing accumulation has lessened the circulating supply, with each $1 billion inflow seizing roughly 500 million XRP.

However, the disparity between the cost bases of mid-term and short-term holders still poses a risk. If XRP fails to maintain the $2.00 threshold, the 6- to 12-month holders will begin to experience deeper losses. In this case, the next critical support level is at $1.80. Should this level also fail, analysts suggest the token could fall further to $1.25, a significant support zone. Conversely, a sustained move above $2.40 would shift the outlook, opening possibilities toward a resistance level of $3.00.