XRP Could Be In For A Rally As Sentiment Drops, Santiment Says

XRP sentiment has hit new lows as traders grow increasingly bearish, but analysts say that, based on past cycles, a surge could be brewing.

XRP has faced a rise in negative comments across social platforms. Traders are watching this closely because similar drops in sentiment have often lined up with short rallies in the past. 

The token currently sits near the lower end of its recent range and has struggled for weeks. Even so, several data points are showing pockets of strength that may help the market steady.

XRP Sentiment Hits Multi Month Lows

Santiment reported that crowd discussions around XRP slid into what it labels the fear zone. 

Its data shows higher levels of doubt than at any time since October. Traders on X, Reddit and Telegram appear to have moved toward stronger bearish language. 

Santiment tracked how often posts lean negative compared to positive and the last time the readings came close to the current level was on November 21. 

Right before XRP gained about 22% over the next three days.

The token is down over the past day and slipped below $2.10. This makes it the weakest performer among major assets by market size right now.

The price is also down more than 40%from its high set in July. That fall has frustrated traders who expected steadier action after earlier gains this year.

Still, sentiment lows do not always line up with lasting downturns. Some analysts say that crowded pessimism can be a sign of exhaustion among sellers. When that happens, even small bursts of buying can lift prices for short stretches.

Social Mood Diverges From On Chain Activity

On chain data adds another layer to the discussion. Santiment noted that XRP Ledger Velocity reached its highest level this year. 

For context, velocity tracks how often tokens change hands. Higher activity may indicate more liquidity on the network. That rise does not guarantee higher prices, but it hints at more economic use.

Some analysts also pointed to similarities between this setup and patterns that appeared in 2016 and 2017. Those years saw extended periods of choppy action before XRP climbed higher. 

Chart watchers also noted that the weekly Stochastic RSI sits in an oversold region, and that reading has sometimes matched the end of downtrends in past cycles.

At the same time, traders are watching resistance near $2.28. Many expect a breakout above that level to open a path toward the $2.75 area. XRP currently trades near $2.09 today, and is down over 4% in the last 24 hours (almost 8% this month).

These mixed signals have left traders balancing fear, caution and curiosity. Some worry the negative sentiment indicates deeper doubts about the asset. Others are eyeing a cycle of crowd fear followed by sudden bursts of buying as a pattern that may repeat.

Related Reading: XRP ETF Holdings Surge by $50.27M Reaching $906.46 Million Total

Why Pessimism Sometimes Works As A Contrarian Signal

Market sentiment tends to swing harder than price. When traders feel nervous, they tend to share more negative comments online. 

That can make the mood look worse than the actual data and when fear spikes, it often means that many traders have already sold or reduced their exposure.

This is why some investors look at heavy pessimism as a spot to watch rather than avoid. 

It does not promise gains, but it indicates that the market may be close to shaking out weaker hands. Once that happens, the price can move with less resistance.

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