XRP is in the spotlight after its price fell about 19% from its January high, pushing market sentiment into the ‘extreme fear’ zone according to Santiment data.
As of 2:15 p.m. today, XRP was trading at $1.9128, down 0.09% since it opened early Friday in Asian trading.
The move is not driven by price alone, but by the increasingly negative chatter that has dominated social media.
When sentiment is at extreme fear levels, it usually signals that retail traders have stopped buying, choosing to wait on the sidelines or exit the market.
In a crypto world that can easily become overcrowded with one-way positions, this can sometimes open the door to a quick rebound as selling pressure begins to subside and small buys come back in.
Fear, however, is not a good indicator of timing. Negative sentiment can linger, especially if the overall market remains volatile and there is no clear catalyst to change the narrative.
The latest on-chain data also paints a mixed picture. The XRP holder structure is now starting to resemble that of early 2022, when new buyers were accumulating tokens at prices lower than the six to twelve month cost of holding.
A similar pattern in February 2022 eventually led to a prolonged decline, with XRP falling from around $0.78 to $0.30 a few months later.
For now, the focus is on the next price action.
If XRP manages to stabilize and recapture key levels, the bearish sentiment could quickly turn around and support the early phase of a recovery.
However, if the weakness continues, the ‘extreme fear’ reading may simply reflect a market still searching for a solid bottom.
