XRP faced significant pressure as the sell-off intensified following a sharp decline in early Q4. As a result of this drop in Q4, the altcoin is now more likely to close 2025 in negative territory.
Despite this situation, there remains hope that investors' buying pressure could reverse the sentiment before the year ends.
XRP holders, loss sell-off
According to on-chain realized profit and loss data, the sell-off in Q4 has been unusually strong. XRP holders are exiting their positions at a loss, indicating a deterioration of trust. Traditionally, large cryptocurrency investors tend to hold during loss periods to avoid realizing losses, expecting recovery over time.
However, this cycle is different. Selling in a loss state shows increased uncertainty about XRP's short-term outlook. This behavior indicates that risk aversion has overtaken long-term beliefs and is contributing to sustained downward pressure in Q4.
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The overall performance flow of XRP highlights difficulties. The current market cycle is on the verge of ending a two-year streak of positive annual returns. In 2023, XRP rose by 81%, and in 2024, it surged by 238% due to regulatory clarity and speculative demand impacts.
On the other hand, 2025 is experiencing a phase of weakening momentum. If the current levels continue, XRP is expected to close down about 11% this year. Such reversals show that changes in the macro environment and shifts in investor sentiment can disrupt past bullish trends.
Despite adjustments, activity on the XRP ledger has also decreased towards the end of December. Network data shows that the number of monthly active trading addresses has hit a low of 34,005. The drop in participation rate signals weak re-engagement from both individual and institutional users.
Increased trading volume is often linked to improved demand. Low trading can impact liquidity, potentially leading to price declines. A decrease in year-end trading volume may be the result of strategic positioning ahead of 2026 rather than short-term speculation.
XRP is trading around $1.85 at the time of writing, down 11% from early 2025. To recover the annual loss, the token price needs to bounce back to $2.10. If it approaches this level, XRP could bring its annual profit and loss to zero and preserve its long-term yield record.
However, currently, downward pressure remains in a deteriorating market environment. If the support level at $1.85 is breached, further declines to $1.70 may follow. Such movements could undermine the bullish narrative and confirm an annual negative close, leading to continued uncertainty into early 2026.
The recovery flow must be predicated on maintaining the support level at $1.85 and increasing participation. If this range is held, a rebound to $1.94 is possible. Breaking through the resistance could turn $2.00 into a support level, paving the way toward the final target of $2.10.
