Ripple (XRP) has been under pressure after setting an all-time high of $3.65 in July 2025 before entering a steady decline in the months that followed. The crypto asset later attempted a fresh upswing in early January and neared $2.40, but failed to gain traction. The pullback has been amplified by market uncertainty, as rising geopolitical tensions pushed investors into a more defensive mode. As a result, XRP sentiment appears to be collapsing fast. But it is important to note that periods of extreme bearish chatter have been followed by rebounds and unexpected moves. Ripple’s Next Battle Zones In its latest update, Santiment said XRP has entered “Extreme Fear” territory based on its social data, as small retail traders have turned pessimistic after a 19% drop from its January 5 high. The analytics firm added that historically, heavy bearish commentary has often been followed by rallies, and prices frequently move opposite to retail expectations. “XRP traders show major FUD, which usually is a rally starter.” Additionally, crypto analyst Ali Martinez also identified crucial price levels to monitor for XRP. He pointed to $1.78 as an important support zone. If the asset manages to break past this level, the next major resistance zones are situated at identifying $1.97 and $2. Distribution Phase XRP is currently trading around 47% below its July 2025 all-time high, following an extraordinary 600% rally since November 2024. CryptoQuant explained that the market naturally entered a phase of distribution and correction, which is being deemed a healthy adjustment. The current bearish sentiment is unusual because it formed after the price had already dropped more than 50%, rather than at the peak. On Binance, funding rates for XRP have been mostly negative since December, which means that leveraged short positions now dominate the market. Previous instances show that markets often move against late consensus, meaning heavy short positioning can create both short-term selling pressure and latent buying pressure. If XRP’s price begins to rise, these short positions could be forced to close, which would boost upward momentum. Similar patterns occurred twice since 2024. During the August-September 2024 period and the April 2025 correction, XRP funding rates turned negative for a time, followed by bullish rebounds as investor sentiment flipped and funding rates returned to positive levels. As such, analysts believe that the current setup could indicate a potential reversal for the crypto asset if buying pressure starts to build. The post Ripple (XRP) Traders Turn Bearish Fast: History Says That Might Be Bullish appeared first on CryptoPotato .
