XRP Sentiment Crashes Into Extreme Fear Zone as Traders Turn Bearish Again

XRP is once again facing rising fear across the crypto market as trader sentiment sharply turns negative following the token’s recent price decline. According to blockchain analytics platform Santiment, XRP crowd sentiment has now entered an “extreme fear” zone that historically appeared before major price rebounds.

The sudden rise in fear comes while XRP continues struggling near the $1.35 range.

XRP Fear Reaches Highest Level in Three Weeks

Santiment data shows that XRP’s positive-to-negative social sentiment ratio has now dropped to nearly 1.1 bullish comments for every 1 bearish comment across social media platforms. That marks the most bearish crowd sentiment level seen in roughly three weeks.

According to analysts, this type of fear-driven environment often appears when retail traders begin panic selling after prolonged sideways price action or sharp corrections.

Historically, similar “FUD zones” have frequently emerged near local market bottoms rather than major tops.

Santiment explained that excessive fear often forces weaker holders out of the market, reducing overall selling pressure and creating conditions for eventual price recovery. The analytics firm pointed to previous XRP sentiment dips seen in late April, where sharp pessimism was later followed by price stabilization and rebounds.

XRP Price Still Under Pressure

Despite the growing attention around the sentiment shift, XRP continues facing short-term market weakness.

The token recently dropped around 5% over the past week and currently trades near the $1.35 level.

Analysts say the broader crypto market slowdown, weaker speculative trading activity, and declining liquidity have all contributed to XRP’s sluggish price action.

However, some traders believe the current setup could create conditions for higher volatility ahead.

Crypto trader “cryptoWZRD” stated that XRP could potentially move toward, $1.40

or even $1.51, if support between $1.33 and $1.35 successfully holds.

Still, some market participants remain cautious due to declining market volume and weak momentum across the altcoin sector.

Whales Continue Buying the Dip

Interestingly, large investors appear to be accumulating XRP despite the negative retail sentiment. According to market data, whale wallets reportedly purchased more than 71 million XRP worth approximately $97 million during the recent price decline.

The accumulation trend suggests some larger holders may view the current fear-driven market conditions as a potential buying opportunity.

At the same time, XRP Ledger activity has also remained relatively strong.

Analysts noted that XRP Ledger payment activity recently increased while institutional demand tied to XRP-related investment products also continued rising.

U.S.-based spot XRP ETFs reportedly reached nearly $1.4 billion in total assets during May, reflecting growing institutional exposure despite weaker retail sentiment.

Binance Liquidity Falls to Six-Year Low

Another major concern for traders is XRP’s declining market depth on Binance. According to Arab Chain from CryptoQuant, XRP liquidity on Binance has now fallen to its weakest level since January 2020.

The analyst explained that XRP’s 30-day liquidity index dropped to approximately 0.043 while the token traded near $1.34. By comparison, the same index previously reached levels above 3 and 4 during stronger trading periods between 2022 and 2024.

Low liquidity does not automatically signal bullish or bearish conditions by itself.

However, thinner order books can make XRP much more sensitive to sudden large buy or sell orders.

That means volatility can increase rapidly even if daily trading volume remains relatively moderate.

Arab Chain also suggested the liquidity decline may reflect weaker speculative activity and reduced fresh capital entering the XRP market.

Fear and Volatility Could Shape XRP’s Next Move

Analysts now believe XRP is entering a highly sensitive market phase where sentiment, liquidity, and whale activity are all colliding at the same time.

The $1.35 to $1.40 range is becoming especially important because it connects, repeated whale accumulation, extremely negative retail sentiment and historically weak liquidity conditions

Historically, extreme fear environments have sometimes created strong recovery setups once selling pressure fades.

However, traders also warn that continued low liquidity could amplify downside volatility if broader crypto market weakness continues.