XRP has slipped below the $2 mark today, reflecting a sustained pullback of approximately 18% from its January 5 peak.
Data from Santiment indicates a significant shift in XRP market sentiment. Over the past week, sentiment has swung from “greed” to “Extreme Fear.” The firm monitors positive and negative discussions across social platforms and notes that sentiment extremes often occur near market turning points.
Sentiment and funding data suggest potential reversal
According to Santiment, bearish crowd behavior frequently precedes counter-trend movements, as markets often move against retail expectations. The rapid shift in sentiment signals instability among traders, which can limit consistent upward momentum.
CryptoQuant analyst, Darkfrost, have identified an additional potential reversal signal in XRP perpetual futures. The funding rates has turned negative, indicating that short positions are paying long positions. This pattern reflects aggressive short-side positioning in the derivatives market.
Darkfrost highlights two comparable periods since 2024, August–September 2024 and April 2025, when similar conditions preceded rebounds. He explains that short position buildups create latent buying pressure, which can amplify recovery rallies.
Binance adds XRP/RLUSD trading pair
Binance introduced a new XRP/RLUSD trading pair on January 21. Ripple CEO Brad Garlinghouse welcomed the listing, noting that it will increase access to RLUSD and strengthen the XRP Ledger ecosystem.
The new pair provides additional liquidity for both assets. Analysts note that deeper liquidity enhances price stability, particularly under favorable market conditions. It also improves trading efficiency on major platforms and offers greater market depth for both institutional and retail investors.
Technical indicators point to short-term recovery potential
Technical analysis reveals a positive divergence as XRP trades below $2, supporting the possibility of a short-term recovery. This signal aligns with changes in market sentiment, derivatives data, and liquidity trends, reinforcing the outlook for a potential rebound.
While XRP continues to face downward pressure, these combined factors remain closely monitored by analysts for indications of a short-term recovery attempt.