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XRP is in a tough spot. The token has been sliding since the beginning of December, now posting a weekly loss of over 7%.
This decline is weighing not just on the price, but also on sentiment. According to data from analytics firm Santiment, the mood among XRP holders has sunk to “extreme fear,” a level that is rarely seen.
Yet, some analysts see early signs of a potential turnaround in this phase.
Extremely Negative Sentiment Around XRP #
Santiment, which monitors online sentiment around cryptocurrencies, notes that it’s raining bearish (negative) comments about XRP on social platforms.
This wave of pessimism is the highest since October. There are indeed reasons for concern. XRP sellers are currently very active.
Last week, large investors, so-called whales, sold a whopping 150 million XRP in 48 hours. That number has since climbed to 510 million XRP.
The result is a market revolving around one level: the zone around $2. A battle seems to be taking place there between parties who are reducing their positions and traders hoping for a price increase.
On Sunday, the price fluctuated between $2.02 and $2.07, eventually closing around $2.03, making that level almost a pivot point. Above that zone, some form of stability remains possible, but if $2.03 breaks, a path to further price decline opens up.
Extreme Sentiment Can Lead to a Price Reversal #
For now, XRP seems to be escaping this correction. Overnight, the price actually rose by 2%, bringing the token to $2.09.
The negative sentiment and uncertain price of XRP have formed a huge contrast for a month with the inflows into the American spot XRP exchange-traded funds (ETFs).
Since the launch of the first fund on November 17, four more have been added, all noting impressive capital inflows. To date, over €770 million has flowed in, without a single day of outflows.
The arrival of Bitcoin and Ethereum ETFs has been enormously positive for these coins. When XRP ETFs launched, the expectation was therefore that XRP would also benefit. This effect has so far failed to materialize.
Santiment reports that the fear surrounding XRP is currently higher than for any other crypto. However, the research firm sees this as an opportunity.
The last time sentiment approached this level of fear, the price rose by 22% in three days. That was on November 21.