Investor Psychology and Market Sentiment
According to data from the cryptocurrency analysis platform Santiment, XRP exhibits a significantly different investor psychology compared to Bitcoin. The levels of fear, uncertainty, and doubt (FUD) have once again surged for XRP. After losing approximately 31% of its value over the past two months, XRP has reached its highest negative sentiment level on social media since October.
Analysis of XRP's Recent Price Pressure
Santiment’s charts indicate days of extreme sentiment with colored circles: red circles, or the “greed zone,” represent days when positive commentary is prevalent, while green circles, or the “fear zone,” denote days dominated by negative opinions.
Following the last date when XRP experienced such a level of fear on November 21, the price rose by 22% within just three days. According to Santiment, the current scenario bears similarities to that previous period, suggesting a potential recovery might be on the horizon for XRP’s price.
However, this time the situation is more complex. XRP has been undergoing a period where investor confidence has been damaged due to the long-awaited “big jump” not materializing.
Impact of ETF Expectations on XRP
One of the most discussed topics concerning XRP has been its failure to achieve the expected momentum even after the launch of spot XRP ETFs. Despite major institutions like Canary Capital, Bitwise, Franklin Templeton, Grayscale, and 21Shares launching ETF products since mid-November, XRP’s price did not experience a significant breakout.
Moreover, these launches failed to create a “sell the news” effect because there wasn’t a meaningful rise beforehand. The market seemed almost indifferent to the ETF announcements.
Nevertheless, Ripple CEO Brad Garlinghouse refutes the claims that the ETF market is overhyped. Garlinghouse emphasizes that institutional interest in XRP ETFs already exceeds $700 million, pointing to robust demand.
According to the CEO, this scenario indicates that institutional investors are engaging more intensely than expected, aiming to access XRP without dealing with custody processes.
A similar pattern is observed with Ethereum, where the approval of spot Ethereum ETFs in the U.S. led to price hikes followed by sharp corrections, once again highlighting the volatility of investor expectations. This suggests that XRP investors might be at risk if they view the ETF impact as the sole “savior.”
Future Outlook for XRP
In conclusion, while XRP is currently experiencing deep levels of investor pessimism, past periods of fear have often paved the way for strong rallies. Although the ETF impact has not delivered as hoped in the short term, increasing institutional demand could provide a more solid price foundation for XRP in the future. From this perspective, XRP has become one of the market’s quietest yet most potential-laden coins.