XRP falls into panic zone! Santiment: Negative sentiment on social media hits new high since October

Crypto analytics firm Santiment’s latest sentiment index shows that XRP is sliding into the panic zone, with bearish comments surging and overwhelming bullish opinions. On Friday, XRP’s trading price hovered near $2.00. After a two-month decline of about 31%, social discussions around the token have rapidly turned negative. According to Santiment, it appears a similar opportunity to two weeks ago is emerging, as extreme pessimism could fuel a short squeeze.

The Contrarian Logic of Santiment’s Sentiment Model

(Source: Santiment)

Santiment’s sentiment indicator tracks price alongside a large volume of positive and negative comments. Its latest signal shows that as bearish information begins to dominate, the balance is tilting toward what it calls the Fear Zone. In this model, red circles mark days when optimism overwhelms pessimism—the Greed Zone—while green circles indicate days when negative comments drown out optimism—the Fear Zone, which typically coincides with capitulation by weak holders.

The core logic of this sentiment tracking model is the contrarian indicator effect of crowd psychology. Santiment treats overall retail market sentiment as a key price indicator and states directly: “Since we know the market often moves opposite to popular forecasts, when comments fall into the panic zone, the market often predicts the coming rebound with precision. Conversely, when comments fall into the greed zone, the market often predicts the coming decline.”

This contrarian logic is not baseless; it’s built on deep insights from behavioral finance. When social media is flooded with negative comments, it means a large number of retail investors have already panic-sold or are preparing to sell. This extreme pessimism often marks the exhaustion of selling pressure, as everyone willing to sell has already done so. At this point, smart money (institutions and professional investors) begins buying against the trend, driving a price rebound.

The case on November 21 perfectly validated this model. Santiment’s data showed that on that day, XRP’s social media sentiment hit an extreme fear level, with negative comments far outnumbering positives. However, XRP’s price rebounded sharply by 22% over the next three days, rising from around $1.80 to $2.20. This dramatic rebound is typical of a short squeeze: when many investors are short or bearish, any positive news can trigger panic covering, pushing prices up rapidly.

Santiment Sentiment Model’s Four Core Principles

The crowd is always wrong: Retail sentiment at extreme pessimism often signals a bottom, extreme optimism signals a top.

Weak holders capitulate: The Fear Zone marks the exit of investors lacking conviction.

Smart money acts contrarian: Professionals buy in fear, sell in greed.

Sentiment cycles are predictable: Fear and greed alternate, providing timing tools for traders.

Santiment urges followers to closely monitor how sentiment continues to shift and “see what others in crypto can’t.” This highlights the unique value of sentiment tracking, as most investors are overwhelmed by current emotions and unable to objectively assess market positioning. Only with systematic data tracking can one identify the contrarian trading opportunities brought by extreme sentiment.

Capitulation Selling and Rebound Potential After 31% Decline

On Friday, XRP’s trading price hovered near $2.00. After a two-month decline of about 31%, social discussions around the token have rapidly turned negative. On the price front, XRP recently dropped about 4.5% to $2.09, with a cumulative monthly decline of about 7%. This ongoing price drop is wearing down community confidence and patience.

A 31% two-month drop is a sharp correction in the crypto market. XRP slid from a November high near $2.90 to the current $2.00 level—a drop big enough to trigger many stop-loss orders and panic selling. In technical analysis, there’s the concept of a “cascade effect”: when prices break key support, a flood of stop-loss orders triggers further declines, causing a vicious cycle.

However, Santiment’s analysis suggests this extreme pessimism may be nearing its end. The company notes traders are looking back to late November: “The last time we saw such levels of fear was November 21, when XRP’s price immediately surged 22% over the next three days. After that, greed took over and the rally quickly stalled. Now, it seems another similar opportunity is appearing, just like two weeks ago.”

The logic of history repeating itself is based on the constancy of human nature. Investors’ psychological reactions to losses are similar: denial at first, then panic, then capitulation. When social media is filled with “XRP is finished” or “Don’t catch the falling knife” comments, it often signals the capitulation phase. Once that’s over, selling pressure is exhausted and a rebound can occur.

The total crypto market cap fell about 1% on the day to $3.22 trillion, with this pullback dragging down major altcoins—even though liquidity remains concentrated in the largest cryptocurrencies. As a top-10 asset by market cap, XRP is unlikely to be immune when the whole market corrects. Compared with smaller tokens, XRP has performed relatively steadily, but is still affected by thinning order books and cautious position sizing.

Three Technical Factors Behind XRP’s 31% Two-Month Drop

Failure to break previous high at $2.90: Multiple failed attempts formed a double or triple top.

Breakdown of key moving averages: Loss of 50-day and 200-day EMAs triggered technical selling.

Declining trading volume: Volume continued to shrink during the decline, indicating weak buying interest.

These swings have occurred against a backdrop of uncertainty over upcoming US policy decisions, weakening global risk appetite, and leveraged traders quickly reducing positions during early rallies. Macro uncertainty has amplified XRP’s price swings, making technical weakness even worse.

Fundamental Support from Ripple’s Institutional Business Expansion

Beyond the charts, Ripple has been working to expand its institutional client base. Last month, the company announced plans to launch digital asset spot brokerage services in the US, expanding its US business. This new service will see Ripple not just as a blockchain technology provider, but as a direct financial services provider, offering one-stop crypto trading and custody solutions to institutional clients.

Earlier, Ripple acquired multi-asset brokerage Hidden Road and merged it into Ripple Prime, combining both firms’ regulatory and operational systems into a single trading and custody platform for professional clients. Hidden Road is a broker with multiple financial licenses, and its integration enables Ripple to offer regulated financial services in the US.

These strategic moves give XRP long-term fundamental support. While community sentiment has collapsed and prices keep falling in the short term, Ripple’s business development hasn’t stalled. The company is transforming from a pure blockchain tech provider into a comprehensive financial services platform—a shift that, if successful, could significantly boost XRP’s intrinsic value.

Analysts following the token say that if cross-border liquidity improves and momentum around stablecoin projects on the XRP Ledger builds, XRP could still gradually move toward the $2.50–$2.75 range. This target is based on the continued expansion of Ripple’s ODL (On-Demand Liquidity) service and the maturing of stablecoin use cases. XRP’s technical advantages in cross-border payments (3–5 second settlements, fees under $0.01) make it highly competitive against the traditional SWIFT system.

However, there are still multiple hurdles to reach the $2.50–$2.75 target from the current $2.00. First are the technical barriers of the 50-day EMA at $2.3068 and the 200-day EMA at $2.4922. Second, it will take time and catalysts for market sentiment to shift from fear to neutral or even bullish. Third, the macro environment needs to improve; Fed rate-cut expectations or improved global risk appetite would both help XRP rebound.

Trading Opportunities and Risk Management Amid Panic Sentiment

Santiment’s analysis suggests that the current extreme community pessimism could once again trigger reflexivity and fuel a short squeeze. Reflexivity refers to market participants’ behaviors influencing one another, forming a self-reinforcing cycle. When everyone is bearish and shorting, any positive news can trigger panic covering; this buying pressure pushes prices up, attracting more shorts to cover, creating a spiral rally.

For traders, today’s extreme panic sentiment presents a potential contrarian trading opportunity. If you choose to enter during the Fear Zone, the risk-reward ratio could be highly favorable. From the current $2.00 up to the November high of $2.90 is a 45% upside, while the support at $1.82 is only 9% down—a risk-reward of roughly 1:5.

However, contrarian trades also carry risks. Sentiment indicators can only identify extremes, not precisely time the rebound. Prices can linger in the Fear Zone for weeks or even months before rebounding, and may even fall further to trigger stop-losses. Therefore, even when building positions based on sentiment, strict risk management is needed: scale in rather than go all-in at once, set clear stop-losses, and keep any single position under 10% of total capital.

Santiment urges followers to closely monitor how sentiment continues to shift, to see what others in crypto can’t. This emphasis on a “counter-consensus” investment philosophy is a hallmark of successful investors. When 99% are bearish, it’s often the 1% bold enough to go long who reap outsized returns.