XRP Faces Renewed FUD Storm as Social Sentiment Turns Negative

XRP, the native token of Ripple, is trading close to $2 as it grapples with a surge of negative sentiment, according to recent data from Santiment. This follows a two-month price decline of approximately 31%. Traders are closely monitoring social media buzz around XRP, which has recently turned bearish, signaling potential market movements.

Key Takeaways

XRP is currently trading around $2 amidst rising fear and doubt in the market.
Social media sentiment has shifted negatively, contrasting with a more positive outlook from earlier in the year.
Historical data suggests a potential rebound opportunity similar to past movements seen in November.
Despite recent losses, analysts believe XRP could rise to between $2.50 and $2.75 if liquidity conditions improve.
Ripple is expanding its institutional services to enhance its market position.

XRP

Renewed Negative Sentiment Around XRP

On Friday, Ripple's cryptocurrency XRP was trading just under $2, as traders encountered another wave of fear and uncertainty (FUD). Recent data from the crypto analytics firm Santiment revealed a significant downturn in social media chatter surrounding XRP, which has experienced a price decline of about 31% over the past two months.

Santiment shared a chart illustrating the relationship between XRP's price and the balance of positive and negative comments on social media, accompanied by a combined sentiment line. The latest findings indicate a strong bearish sentiment, marking a departure from the more balanced perspectives previously observed this year.

Santiment’s sentiment analysis tracks XRP's price alongside the flow of positive and negative commentary about it. The newest data indicates a shift into what the firm calls the "fear zone," where the volume of negative messages is overwhelming.

Traders Keep an Eye on Potential Rebound

The Santiment model indicates that red circles on its charts denote days when optimism outweighs pessimism (the "greed zone"), while green circles represent periods of overwhelming negativity (the "fear zone"). These dips in sentiment often correlate with capitulation among weaker investors.

Traders are reminded of the significant surge in XRP's price experienced in late November. Santiment stated, “The last time we saw a fear level similar to what we have now was on November 21st, when $XRP’s price soared by +22% in the following 3 days. Afterward, the market succumbed to greed, halting the rally. Currently, we may be at the cusp of a similar opportunity, just as we were two weeks ago.”

Santiment encourages traders to keep monitoring the sentiment dashboard to spot shifts in crowd psychology that could lead to a reflexive price movement, where extreme pessimism leads to a potential short squeeze.

Market Pressures Affecting XRP

Currently, XRP is trading down about 4.5% at $2.09, marking a total loss of roughly 7% over the last month. The overall cryptocurrency market value dipped by about 1% to $3.22 trillion, impacting major altcoins even as liquidity remains focused on larger cryptocurrencies.

Compared to minor tokens, XRP displays relative price stability; however, it is still influenced by the thinning order books and cautious market positioning. This downward trend occurs amid uncertainty surrounding upcoming U.S. policy decisions, a weaker global appetite for risk, and quick position closures by leveraged traders who had entered earlier rallies.

Despite this, analysts believe XRP could rise to between $2.50 and $2.75 if liquidity in cross-border transactions improves and stablecoin projects on the XRP Ledger gain traction.

Ripple's Institutional Expansion

In addition to market dynamics, Ripple is actively working to strengthen its institutional presence. Last month, the company announced the expansion of its digital asset spot prime brokerage services within the U.S.

This initiative follows Ripple's acquisition of the multi-asset prime brokerage firm Hidden Road, which is now integrated into Ripple Prime. This merger aims to combine regulatory and operational elements of both firms into a unified trading and custody platform tailored for professional clients.