XRP falls into the "fear zone": Is a strong reversal signal approaching?

XRP is currently in the “fear” zone on the market – a phenomenon that has appeared before impressive recoveries in the past.

Increasing Negative Sentiment Toward XRP

According to the market analysis platform Santiment, the amount of negative comments about XRP on social media is far above average. This increases the likelihood of a strong price rebound soon.

The chart illustrates that, in the two most recent times when retail investor fear was as low as it is now (on 11/21 and 12/5), XRP’s price immediately rebounded by 22% and 11%, respectively, within a few days.

Santiment states: “Historically, this setup often leads to price increases.”

“When retail investors doubt the growth potential of a coin, the likelihood of a price increase is even greater.”

Currently, XRP has decreased by 1.8% in the past 24 hours, falling below the $1.85 mark, bringing the total correction from the 7-year high of (3.66 USD) up to 49%.

Many analysts also agree that this price decline of XRP is not necessarily a negative signal.

“Sentiment around XRP is turning negative, but the flow of funds does not show panic,” shared DeFiPeniel on X, referring to the continuous influx of capital into spot ETFs since their launch.

According to Coinphoton, these investment products have surpassed $1.2 billion in assets under management, with total capital inflow reaching $1.13 billion.

This reinforces long-term confidence from institutional investors, despite the “boring” price movements, DeFiPeniel notes, adding:

“The market does not bottom out when sentiment improves. The bottom only appears when prices hold steady and investor confidence shatters.”

Important XRP Price Levels to Watch

For a sustainable recovery, XRP needs to break through the resistance zone formed by the long-standing downtrend at $1.92 and turn this area into support.

The next major resistance lies between $1.96 and $2.00, where investors have accumulated 1.5 billion XRP, according to Glassnode’s realized cap heatmap.

The area from $2.10 to $2.50 will also be a significant challenge for any recovery attempt. This zone contains key moving averages: the 50-day SMA at $2.10, the 50-week EMA at $2.25, and the 50-week SMA at $2.50.

Daily XRP/USD Chart | Source: TradingViewAccording to C3_trading on X: “The XRP/USD pair is still in a strong downtrend. The price has been repeatedly rejected at the $2.50–$2.70 zone (by the 200 SMA and the downward trendline).”

This analyst believes that the technical trend remains bearish until a clear breakout from the downtrend channel occurs.

The accompanying chart shows that the upper boundary of the downtrend channel is around $1.92–$1.96, which needs to be broken to end the prolonged downtrend.

“Wait for a breakout above $2.50 to confirm a trend reversal; otherwise, expect the price to continue declining.”

Meanwhile, the selling side will try to hold the resistance zone at $1.92 and push the price below the $1.80 mark. The next support levels are at $1.75 (reached on 12/19) and the April low of $1.61.

According to Coinphoton, if XRP loses support at $1.61, the risk of a sharp drop to $1.25 and then to the critical psychological support zone at $1 in 2026 will significantly increase.