XRP’s Extreme Fear Level Mirrors Past 22 % Rally

The social sentiment surrounding XRP has fallen to its lowest point since October, according to data from Santiment. The platform categorizes this current market mood as a "fear zone." This significant drop in sentiment contrasts with previous market movements, where similar periods of fear have historically preceded notable price rebounds for the cryptocurrency.

Social Sentiment for XRP Crashes Sharply into the Fear Zone

The analytics platform Santiment reports that the social sentiment concerning XRP has plummeted to its lowest point since October, entering what analysts refer to as the fear zone. This development occurs as an expert highlights potential limitations to XRP's growth.

While this situation may appear critical, it is not without precedent. Santiment notes that the last time this level of fear was observed, the cryptocurrency's price subsequently rebounded by 22% within a three-day period.

Santiment emphasized, "The last time such a fear level was observed in the community was on November 21, and the crypto price immediately jumped 22% over the following three days." The platform further suggests, "an opportunity seems to present itself again, as it did two weeks ago."

Key factual details to consider include:

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  XRP's social sentiment is at its lowest point since October, according to Santiment.
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  On November 21, a similar level of fear preceded a 22% rally over three days.
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  XRP has experienced a 4.6% drop in the last 24 hours, falling below $2.10.
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  This represents the worst performance among the top ten cryptocurrencies by market capitalization during this period.
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  The cryptocurrency is currently down 42% from its all-time high reached in July.
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  Santiment suggests that this decline in sentiment could create a buying opportunity, similar to what has been observed in comparable market setups.

While these signals do not guarantee a market reversal, they offer insight into the cryptocurrency market's evolution. Extreme fear may indicate a turning point rather than a signal for further decline.

Institutional and Technical Supports Keep XRP Afloat

Amidst the focus on market sentiment, certain observers highlight another aspect: XRP's technical resilience and sustained institutional interest.

Justin d’Anethan, head of research at Arctic Digital, commented that "XRP looks less and less like a wave and more and more like a puddle." He believes that prices are stagnating in an area of low conviction, approaching capitulation.

However, he also stated, "this is not entirely bearish, as these zones often mark a bottom that can then benefit from legal advances, regulatory clarity, a US approach, and the value of cross-border payment."

Nick Ruck, director at LVRG Research, points to the $2 threshold's resilience, even within a generally bearish market. He attributes this stability partly to institutional inflows, noting that "a persistent bullish momentum is fueled by sustained institutional flows exceeding $750 million in spot ETFs this month."

Although daily inflows have decreased, with only $12.8 million recorded on Thursday—the lowest level since November 21, according to SoSoValue—cumulative flows have remained positive since the launch of these products in mid-November. These funds collectively hold $881 million in net assets across five offerings.

The price of XRP is currently navigating a period of tension between strong technical indicators and deteriorating social sentiment. If past patterns hold true, this phase of emotional retreat could precede a bullish movement. The upcoming days will be crucial in confirming or refuting this scenario.