XRP Price Enters “Extreme Fear” Zone, Signals a Classic Setup for a Rally: Santiment

The XRP price has reportedly entered the “extreme fear” zone after shedding nearly 20% from its early 2026 highs. With the current sentiment marking growing pessimism among retail traders, the mood around the Ripple token is turning cautious. However, analysts remain optimistic, positing that heightened fear has historically preceded short-term price rallies.

A Contrarian Signal Emerges as XRP Price Slips Below $2

According to the latest Santiment analysis, the XRP price has dropped to the level of “extreme fear,” as the token is still being traded under the crucial $2 threshold. However, experts consider this an early sign of a possible XRP price surge, as past patterns indicate identical shifts.

It is worth noting that this phase reflects a sharp change in the sentiment of retail investors. As the Ripple token price continues to slip, traders are showing less interest in the altcoin. Thus, this deep pessimistic view has sent the cryptocurrency into the intense bearish zone.  

However, Santiment analysts project the potential XRP price rally, asserting that heightened fear has historically acted as a contrarian signal. The platform noted,

Reportedly, the ratio of the positive to negative sentiment of XRP fell below the 1.873 level on January 20. This signals the token’s move into the extreme fear phase. As the ratio continued to slide since then, it has now reached about 1.794. This reflects the rising anxiety of retail investors who remain highly pessimistic about the XRP price’s future.

The current fall coincides with the massive XRP ETF outflow. As CoinGape reported, the US spot XRP ETFs recorded the second net outflow of about $53 million on January 21.

What Historical Patterns Reveal?

As per historical patterns, Ripple’s native token has often surged after the extreme fear zone. Santiment stated that traders utilize the bearish sentiment as a buy-the-dip opportunity, leading to a potential uptrend. Thus, history reveals that whenever the retail sentiment dips below 1.873, the token has bounced back from its lows.

For instance, on January 2, 2026, the sentiment around the token was fearful as it tried to recover from a 30% decline in Q4 2025. Soon, it exhibited a short-term hike, reaching its yearly high of $2.41, with a significant 29% surge.

Again, on January 18, the XRP price saw a similar situation. Slipping back from its $2.41 peak, the token entered the extreme fear zone again. But it was followed by another surge, with the crypto price hitting $2. As the last week saw extreme volatility, the token once again retreated, but the market expected a 25% surge ahead of Brad Garlinghouse’s speech in Davos.

Currently, the XRP price is marked at $1.94, with a 2.11% daily surge. Despite a 3.4% monthly hike, the token has fallen by a notable 7.5% over the past seven days. This indicates that the token is showing slight recovery from its weekly low of $1.8, reinforcing Santiment’s projection.