XRP Plunges into Fear Zone - History Says This Could Spark the Next Major Rally

XRP just flashed a classic buy signal. The digital asset has tumbled into the so-called 'Fear Zone' on market sentiment gauges—a territory that has repeatedly served as the launchpad for its most explosive price surges.

Decoding the Fear Gauge

Market sentiment tools track the collective mood swings of investors, oscillating between extreme greed and paralyzing fear. When fear dominates, it often signals a market oversold to irrational levels. For XRP, historical data shows a stubborn pattern: periods of peak fear consistently precede sharp upward reversals. It's the contrarian's dream—the crowd panics, the smart money loads up.

A Pattern of Pain Before Gain

This isn't theory; it's a track record. Scrolling through XRP's price history reveals multiple instances where a dive into the fear zone marked not the beginning of a prolonged downturn, but the exact low before a powerful rally. The asset seems to perform its best technical magic when sentiment is at its worst, bypassing weak hands and shaking out impatient investors.

Why This Time Could Be Different (Or Exactly the Same)

While past performance is the favorite toy of finance professionals—useful for presentations but never a guarantee—the current setup carries weight. Macro conditions, regulatory clarity for the broader sector, and network development progress all combine with this technical signal. It creates a potent mix where a single catalyst could ignite a move.

The cynical take? Wall Street spends millions on quant models to tell them what crypto traders learn for free: when everyone is running for the exits, it's usually time to check the entrance. XRP is now testing that door. Will it hold, or will it swing open into the next leg up? The fear meter suggests we're about to find out.

XRP Fear Signals Possible Price Reversal 

According to Santiment, pessimism about XRP is at its historical extremes. In the past, these levels have characteristically been turning points for this token.

Fear indicators recorded in previous cycles were NEAR local price bottoms, with sharp, short-term price uptrends following. XRP is trading just below a key support area constructed during recent consolidation. 

Buyers have been taking control when the price reaches this area time and again. This bias changes according to a shift in its technical setup. 

Source: X

On the 4-hour chart, XRP occupies an area above the 0.786 Fibonacci retracement, which is one of the essential areas that act as a pivot point at corrective stages.

Price action also indicates recurring efforts to regain the VWAP session, which is an indication of consistent demand and zero panic selling. The effects of any sell pressure are diminishing around the current levels.

Source: TradingView

Derivatives Signal Upside Momentum

Although the sell volume has been falling as of late, it has not been growing aggressively. Sharp breakdowns normally happen alongside an increase in volume, but this is currently lacking.

Derivatives information confirms this positive backdrop.CoinGlass revealed a 10% increase in the token’s futures volume. With the price stabilizing, open interest has been rising steadily, and this is usually a good indicator of accumulation.

Source: Coinglass

Traders are not hedging against downside risk, but positioning for upside. This setup fits the extreme pessimistic bias cited by Santiment. 

Prediction markets still show cautiousness. The odds of xrp price by the end of the year are high, between $1.50 and $2.00. However, odds above $2 are slowly increasing. 

Source: Gemini

According to the current setup, the next important price target for the token is at $2.30. This level corresponds with one of the more important liquidity zones in the previous price cycle. 

XRP Breakout Could Target $2.30 

If the token breaks cleanly above $2, its next target will likely be $2.30. There is also a bullish bias in the overall market conditions, with XRP benefiting from such conditions.

However, a decline below $1.85 WOULD undermine the bullish structure. Meanwhile, institutional demand for this token is still high, as evidenced by the inflow into its ETFs.