XRP has been caught in the throes of an intense bear market throughout the past couple of years, and although many larger cryptocurrencies have been able to recover most of their losses, the embattled token still remains down roughly 95% from its highs.
It is also important to note that data regarding the cryptocurrency’s aggregated cost basis shows that the vast majority of investors are also severely underwater on their XRP investments.
This comes as it sees degrading technical strength, with some analysts forecasting major downside.
One veteran trader believes that this weakness is particularly clear while looking towards its BTC trading pair – noting that it may soon decline by another 30% or more.
This potential decline will put embattled XRP investors in a tough position, as the value of their holdings will have all but evaporated throughout the course of this recent downtrend.
XRP Investors Are down 86% on Average Due to Massive Cost Basis
During the peak of the crypto market mania seen in late-2017 and the first couple of weeks of 2018, XRP was able to rally as high as $3.80.
Its surge to these highs was short-lived, however, as this is where it found massive resistance that caused it to start its descent that would last for years, ultimately leading it down to lows in the sub-$0.10 region this past March.
Much of the embattled token’s initial promise was rooted in the speculated utility that Ripple’s cross border xRapid payment solutions would garner.
Investors have not, however, seen too much notable progress on this front, which has led to a mass exodus of funds away from the token.
It even recently surrendered its position as the third largest digital asset by market cap to the stablecoin Tether.
This decline has left a trail of “bagholders” in its wake, and data shows that the crypto’s average investor bough into the token at $1.38.
Ryan Watkins – a researcher at Messari – spoke about this in a recent tweet, saying:
“While not a lot of Bitcoin traded near Bitcoin’s all-time high, the same can’t be said for XRP. Despite XRP having only closed above $1.00 on just 2.1% of its trading days, XRP’s aggregate estimated cost basis is $1.38. This suggests most XRP investors are deeply in the red.”
Why This Number May Soon Grow
Peter Brandt, a veteran trader, recently explained that he anticipates the token to see significantly further weakness in the weeks and months ahead.
“Looks like Ripple Labs has blown the wad allocated to support XRPBTC at .00002060 to .0002075 levels. If ice-line cannot be reclaimed, look for new support at .0000194 on way to .0000145.”
This means that the average loss of XRP’s investors may soon balloon.
Featured image from Shutterstock. Charts from TradingView.