XRP, will it eventually break $1? Market fear at its peak

▲ XRP/ChatGPT generated image ©

Investor sentiment for XRP (Ripple) is rapidly freezing. As market fear, according to Santiment, enters the 'FUD zone', and liquidity sharply declines, the market is even discussing the possibility of XRP breaking below $1.

According to the cryptocurrency specialized media outlet Finbold on May 26 (local time), social media investor sentiment for XRP has recently deteriorated sharply. Currently, the ratio of positive to negative comments related to XRP has fallen to approximately 1 bearish opinion for every 1.1 bullish opinions, which is the highest level of fear recorded in the last three weeks. Santiment analyzed that the current market atmosphere has entered the 'FUD zone', where individual investors' anxiety and skepticism are maximized.

However, past cases show that short-term rebounds have often occurred after such extreme fear phases. The media explained that previously, when XRP investor sentiment deteriorated to the same level, weak stop-loss orders were cleared from the market, followed by price stability or a rebound rally. Conversely, in the 'FOMO zone', where investor sentiment was overly optimistic, XRP repeatedly formed short-term highs before reversing downwards, according to the analysis.

The market is also focusing on decreasing liquidity as a key risk. According to CryptoQuant data, Binance's 30-day XRP liquidity index has currently fallen to its lowest level since January 2020. If exchange liquidity decreases, the likelihood of increased price volatility from just buy and sell orders rises. Indeed, XRP is struggling to regain upward momentum after falling significantly from its recent high of $3.04.

Technical analysis also suggests the possibility of further declines. Cryptocurrency analyst Ali Martinez predicted that if the current downtrend continues within the long-term parallel channel structure, the area around $0.73 could act as a key accumulation zone. This price level has also served as strong support in past cycles, he explained.

Currently, XRP is in a phase where deteriorating market sentiment and the possibility of a contrarian rebound are clashing simultaneously. XRP is currently trading around $1.34, having fallen approximately 1.3% in the last 24 hours and over 2% on a weekly basis. The market is focusing on whether the $1.30 support level can be maintained as a key variable determining short-term direction.

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