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As 2026 begins, XRP is starting the year on a bearish note, with investor sentiment plummeting to levels of extreme fear. Despite these challenging conditions, analysts are suggesting that this negativity may set the stage for a significant bullish reversal, drawing parallels to historical trends.
Institutional Buyers Remain Active
Reports indicate that periods of extreme sentiment have often preceded XRP rallies with impressive gains, at times exceeding 1,000%. Data from Santiment indicates that bearish mentions of XRP are now running 20-30% higher than the subdued averages seen in November.
This deepening negativity, coupled with XRP stabilizing between $1.8 and $1.9 mark, highlights “a classic market divergence”: sentiment continues to worsen while prices consolidate, suggesting that emotional capitulation is occurring faster than any fundamental deterioration.
Beneath this wave of retail fear, however, institutional behavior paints a more positive picture. Spot XRP exchange-traded funds (ETFs) recorded inflows of approximately $424 million in December alone, making them the best-performing crypto ETF product.
This contrast between extreme retail sentiment—currently at an extreme fear level of 24—and substantial institutional accumulation, which stands at around $1.3 billion over the past 50 days, often precedes market reversals more reliably than sentiment readings alone indicate.
70-75% Chance Of Bullish Reversal
For XRP, the current setup combines extreme fear readings with a social sentiment significantly above baseline levels, alongside price consolidation, creating a historical pattern that has led to substantial rallies multiple times since 2020.
For instance, back in the 2020-2021 cycle, XRP dropped to $0.17 amid the US Securities and Exchange Commission (SEC) lawsuit, followed by a 1,053% increase to $1.96 over just four months.
Today’s scenario mirrors this past occurrence. With institutional accumulation diverging sharply from retail capitulation, historical data suggests that this combination yields a 70-75% chance of a bullish reversal within the next two to eight weeks.
Current trading conditions for XRP sit at approximately $1.90, with the Fear & Greed Index at 24. This setup creates three potential scenarios.
Three Potential Price Scenarios For XRP
In the most favorable bullish scenario, the Trump administration could announce clear pro-crypto regulatory policies in the first quarter of the year, BlackRock might file an XRP ETF application, or the adoption of Ripple’s RLUSD stablecoin could rapidly scale above $2-3 billion.
Historically, when the Fear & Greed Index climbs from 24 into neutral territory (between 50 and 60), XRP often rallies between 30-50%, setting targets between $2.44 and $2.82. If bullish momentum continues into mild greed (70+), XRP could reach the $3.00-$3.20 range.
In a more neutral scenario, sentiment may gradually normalize without dramatic catalysts, with ETF inflows continuing to average between $200-300 million monthly. As RLUSD organically grows through existing partnerships, fears could naturally subside over a span of six to eight weeks.
As the Fear & Greed Index rises from 24 to the 45-55 range, XRP has typically appreciated between 15-25%, targeting between $2.16 and $2.35. If the support at $1.85 holds through January, and trading volume expands above $1.98, the price could extend toward $2.40-$2.50.
In a bearish outcome, sentiment could linger in extreme fear (below 30) for over eight weeks without relief. A decisive break below $1.85 on substantial volume would see XRP testing support levels around $1.65-$1.70.
The altcoin has surged by over 6% in the past 24 hours towards $1.98 amid a broader recovery in the crypto market.
Featured image from DALL-E, chart from TradingView.com
