XRP sentiment sinks into “Extreme Fear” territory as bears take over after January 5 highs
XRP’s market sentiment has slid into “extreme fear” after a steep sell-off erased nearly a fifth of its value since the year began. The drop has shaken retail sentiment around the fifth-largest crypto by market cap.
According to social analytics platform Santiment, market confidence in XRP has deteriorated from its local peak on January 5, when prices traded above $2.35. Ripple’s token has since traded down 19%, dragging prices toward the lower $1.90s over the last seven days.
Negative commentary on social platforms surged alongside the token’s price fall, pushing sentiment into retail capitulation, Santiment’s analysis noted.
XRP falls 7% in a week; negative sentiment could help it recover
On Santiment’s FUD against price chart for XRP, sentiment briefly dipped into fear territory on January 2, the token traded near $1.85, shortly before prices rebounded above $2.00. By January 7, social optimism had spiked into a greed zone off of an XRP rally to $2.30, which later proved to be a local top.
The same pattern was visible on January 11 and January 13, when sentiment jumped into greed again while prices hovered between $2.20 and $2.35, a period that preceded holders dropping their positions.
Before this business week began, sentiment flipped to deep fear, sending XRP down to $1.90, one of the lowest sentiment readings of the month. A further dip on January 20–21 saw fear intensify, while price action stabilized near the $1.85–$1.88 range.
Santiment noted that historically, such extremes in bearish commentary have preceded relief rallies since the market moves in the opposite direction of retail’s expectations.
However, one user on X believes the market environment is now much different from what it was in previous cycles, rendering the analysis useless.
“So you’re following some charts from years ago when literally everything has changed. Since that time, the SEC lawsuit is over, and ETFs are launching. Partnerships are in place. Can we throw out this theory completely? None of this matters. all new territory,” the critic surmised.
XRP’s decline spells a flush into its $1.88 support level, and the token is consolidating within descending and symmetrical triangle formations in the last three months. The pullback has held Ripple’s token back from walking past the support trendline that has guided the price since late 2024.
XRP FUD against the price chart. Source: Santiment
According to some market watchers, as long as the token holds above the $1.90 support level, the bias would remain cautiously bullish. That said, a descending resistance trendline overhead, coupled with a consolidation range around $2.05–$2.15, has capped any upside movement.
XRP is currently trading about 49% below its all-time high set in July, which followed an extraordinary rally of more than 600% from November 2024. Yet, negative sentiment peaked after a 50%+ downtick from the cycle top, per Santiment Feed’s analysis.
XRP funding rates flashing negatives
CryptoQuant’s Binance Funding data shows rates have been mostly in the negative since December. This suggests traders are betting against XRP, even as the market assumes a significant downside is behind the token’s past.
While the accumulation of short positions can amplify near-term selling pressure, it also builds latent buying pressure through liquidations. Analyst Darkfost explained that in the event of a price uptick, liquidations from short sellers would boost its upward momentum.
The pattern played out twice since 2024, during the August–September 2024 period and again in the April 2025 correction, when negative funding preceded rebounds. On the XRP/USDT pair, the recent rejection from the $2.00 resistance block coincided with the price failing to reclaim the declining 100-day and 200-day moving averages.
The daily relative strength index has fallen from overbought levels and now sits below the neutral 50 level, which could signal that momentum has flipped from short covering to negativity.
Bulls are also excited about Ripple’s US dollar-backed stablecoin’s listing for spot trading on Binance. The listing will initially feature trading pairs XRP/RLUSD and RLUSD/USDT on launch. Binance will also add portfolio margin eligibility for RLUSD and plans to include the stablecoin in Binance Earn products to expand user yield-generation options.
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