Why XRP's Q3 Rally is Unlikely to Recur: Understanding Investor Psychology in Q4

The recent trends surrounding Ripple and XRP exhibit a decoupling phenomenon, where investor actions are increasingly driven by psychological factors. As we enter Q4, a significant psychological divergence is observed, with many investors realizing losses and taking profits off the table, making it challenging for XRP to replicate the success of Q3.

Key Takeaways

The relationship between Ripple and XRP is weakening, as investors are selling during moments of price decline, indicating that the recent rally is more about investor sentiment than actual market strength.
A notable psychological divide exists in Q4, marked by a rise in realized losses and increased profit-taking, creating a complex environment for potential future gains.
Ripple’s growth in institutional adoption contrasts with XRP’s downward trend, which was down 20% this quarter despite Ripple's advancements.

XRP

Understanding XRP's Q3 Investor Psychology

In Q3, XRP experienced one of its strongest bullish movements in 2025. The altcoin achieved a 27% quarterly increase, reaching a peak of $3.60. This marked XRP's most vigorous growth since the breakout in Q4 2024 when it surged by 240%, emerging from a prolonged slump.

From a psychological perspective, Q3 was a time for investors to prepare for further gains. As noted by AMBCrypto, following a clean price surge on top of a sizable run, traders began to anticipate more upward momentum. Analysis of the Aggregate Cost Basis suggests this optimism was justified.

XRP Cost Basis Source: Glassnode

A prominent yellow band illustrated a concentrated supply of 1 billion XRP at the $3.30 level. In contrast, a darker red band at the $2.80 to $2.82 range highlighted a significant 2.5 billion XRP in Cost Basis Density, the largest cluster on the chart. This area reflects substantial accumulation during XRP’s 27% rally in Q3, reinforcing the idea that investors were positioning themselves for continued bullish activity.

However, as we transitioned into Q4, XRP revealed a noticeable psychological divergence, indicating that expectations for a Q3-like rally may be overly ambitious.

Ripple's Q3 Confidence Faces Q4 Reality

As previously mentioned, Ripple and XRP have not maintained consistent momentum. Data from Glassnode showcases another vital divergence in this cycle. During Q3, XRP's climb to $3.60 corresponded with a significant rise in profits being taken, approximately $550 million daily.

Typically, these profit-taking spikes indicate a bullish environment, where traders are cashing in while still allowing for upward potential. However, as we move into Q4, profit realizations surged by 240%, increasing from $65 million to $220 million per day, while XRP’s value dropped from $3.09 to $2.30.

Ripple Data Source: Glassnode

In simple terms, traders are offloading their holdings during price weakness. Psychologically, this increased selling pressure floods the market with additional supply at a time when many long-term holders (HODLers) are facing substantial losses, with realized losses surpassing $470 million as XRP dipped below $2.50.

In conclusion, the conditions in Q4 for XRP reveal significant psychological strain. With rising realized and unrealized losses, accelerated profit-taking, and Ripple’s institutional growth failing to influence XRP’s price positively, achieving a rally above $3 appears increasingly difficult.