XRP Capitulation Shock: 19% Crash Sparks Contrarian Hope

XRP has again become a litmus test for investors’ patience. The coin has experienced a rollercoaster-like ride, starting the year positively and finally falling to difficult areas. Retail traders have already begun to give up, and their capitulation is quite obvious now. Following the slump, social sentiment has dropped to the lowest level of “Extreme Fear”. For a lot of people, hope has disappeared nearly overnight.

Santiment’s data is quite revealing. Small traders who only weeks earlier were on the top of the world have now completely turned the other way. The price of XRP has gone down about 19% since the year began on January 5. That price movement took away people’s trust very quickly. The digital currency that had almost reached $2.40 in the first days of January, has been draining down and lost the important psychological mark of $2.00.

Source: X

Also Read: Rothschild Reports Show Indirect XRP Exposure via SBI Holdings Since 2018

XRP Retail Capitulation Signals Potential Turning Point

Extreme mood fluctuations are not a stranger to the crypto space. However, the experienced market observers are always alert for the signals of extreme fear. The past records indicate that when the retail investors go very bearish, the markets turn bullish. The sellers late in the day take losses. The short positions become numerous. Therefore, the squeeze follows.

XRP is in an area that is quite similar to the one just described. The data from Santiment indicates that the crowd has mostly lost hope. As per the analysts, the prices are likely to move in the direction opposite to that of the retail expectations most of the time. If the pattern continues, the present season of negativity could signal a local minimum.

However, after the fear diminishes, XRP might try to restore the ground that has been lost and to confront the nearby resistance levels.

This does not mean that a rally will happen right away. Yet, it does imply that the momentum of the downside may be losing its strength. The markets seldom give a reward for the consensus, especially when it becomes so one-sided.

XRP Outlook Remains Firm as Long-Term Bulls Hold Ground

Though the retail sentiment is breaking down, the long-term bullishness is still there. Ripple’s head Brad Garlinghouse does not seem to care much about the correction happening in the market. He has just expressed that the whole crypto industry still has a chance for very significant upside in the future.

The forecasts from the institutions are in line with that confidence. A research memo from Standard Chartered predicts that the price of XRP may go as high as $8.00 in 2026. These targets are in stark contrast to the gloom and doom narrative of today.

At this point, XRP is on the fence. Retail investors are scared. The contrarian ones are keeping a close watch. Moreover, history implies that such situations hardly ever linger on.

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