XRP experienced a severe market correction in February 2026, with its price retracing nearly 70% from its 2025 high of $3.65 to around $1.10. This decline triggered the largest spike in realized losses since 2022, amounting to roughly $908 million, as structural weaknesses, leveraged positioning, and forced selling cascaded through the market. However, data indicates distressed supply is being absorbed by institutional spot ETFs and large wallets, with exchange reserves at five-year lows, potentially signaling a late-stage capitulation phase.
The market structure for Ripple [XRP] weakened progressively as the asset retraced nearly 70% from its 2025 highs. Lower highs formed first, then rebounds shortened, signaling distribution rather than accumulation.
Once key support levels broke, stop-loss clusters activated and derivative liquidations accelerated. Forced selling migrated on-chain as distressed holders transferred coins to exchanges, and realized losses surged to roughly $908 million.
That magnitude reflects forced exit behavior rather than discretionary selling, while Open Interest simultaneously contracted as leverage flushed. Market participants reacted asymmetrically, with short-term traders de-risking while large wallets selectively absorbed panic liquidity.
Historically, a prior $1.93 billion realized-loss event preceded a 114% recovery. In the current cycle, 30-day volatility is lower, which suggests a more stable market structure despite the price decline.
Since the start of 2026, XRP whale inflows to Binance have reached approximately 3.8 billion coins amid the price decline while exchange reserves fell to five-year lows. Meanwhile, institutional spot ETF inflows reached 12.6 million XRP per week, quietly absorbing distressed supply.
Funding Rates remained negative for 12 straight days, reflecting persistent bearish bias. At the sentiment level, the Fear and Greed Index dropped to 9, marking extreme fear.
