XRP displayed a bullish reversal signal on the weekly chart while social sentiment plunged to its most negative levels since October, creating conditions that historically preceded sharp rebounds.
The TD Sequential indicator, which identifies trend exhaustion points, printed a buy signal on XRP's weekly timeframe, according to crypto analyst Ali Martinez.
The setup comes as analytics platform Santiment reported XRP sentiment entering the "fear zone" amid a 31% decline over two months.
XRP was trading at $2.03 at press time, down 4.6% in 24 hours and marking the weakest performance among top-10 cryptocurrencies by market capitalization. The cryptocurrency remains 42% below its July 2025 all-time high.
What Happened
The TD Sequential indicator works by counting consecutive price bars moving in one direction to identify potential reversals. When a green "1" appears after a completed bearish sequence, it suggests selling pressure may be exhausting and buyers could step in.
Social sentiment data from Santiment showed XRP experiencing "the most fear, uncertainty and doubt since October," with negative commentary significantly outweighing positive discussions. The platform noted similar fear levels on November 21 preceded a 22% price rally over three days.
"As of now, an opportunity appears to be emerging just like two weeks ago," Santiment stated in its analysis.
The cryptocurrency has declined 31% over the past two months while Bitcoin maintained stronger performance, contributing to investor frustration reflected in social media discussions. Santiment's data identifies "Fear Zone" periods where bearish commentary dominates and "Greed Zone" phases when excessive optimism emerges.
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Trading volume for XRP reached $4.19 billion in the past 24 hours despite the price decline, reflecting sustained participation from traders and institutional desks.
Why It Matters
Historical patterns suggest extreme fear readings can mark accumulation opportunities before rebounds. The November 21 rally demonstrated how quickly sentiment can reverse when XRP jumped 22% in three days before greed took over and halted momentum.
Spot XRP exchange-traded funds have maintained positive inflows since their mid-November launch, with total net assets reaching $881 million across five funds. Thursday saw $12.8 million in inflows, the lowest since November 21, though institutional accumulation continues to provide price support.
Analysts identified $2.50 as the next major resistance zone if buying pressure builds following the technical signal. Martinez emphasized XRP must break above $2.28 for a sustained move toward $2.75, while the cryptocurrency needs to hold $2.00 support to validate the bullish setup.
The TD Sequential indicator has shown 65-75% probability of indicating short-term reversals when used across high-volatility assets, based on historical pattern studies. XRP's recent decline from $3.00 to near $2.00 aligns with previous setups that preceded temporary trend changes.
However, crypto analyst Justin d'Anethan of Arctic Digital cautioned that prices remain stuck in a "low-conviction" range near $2.00, though he noted such zones "often mark a bottom that can then capitalize on legal wins, regulatory clarity and a long-standing cross-border payment value."
The combination of technical buy signals and extreme fear sentiment creates conditions market participants watch for potential reversals, though outcomes depend on broader market dynamics and whether Bitcoin maintains stability above key support levels.
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