XRP falls to market panic level after more than 18 months of decline from its peak

The Ripple token has experienced a significant correction in recent weeks, seeing its value drop approximately 19% since early January, while market sentiment is collapsing to panic levels according to Santiment. Data shows that retail investors have massively withdrawn from positions, a move that has historically preceded sharp recoveries once selling pressure subsides and the market finds a more solid bottom.

Santiment records extreme panic in market sentiment

The panic reading comes from Santiment’s analysis of social dialogue on major platforms. When negativity dominates, it typically means that retail traders have become cautious, stopped buying on dips, or decided to stay completely on the sidelines. In crypto markets, where positions can congest quickly, this matters because movements can be abrupt once selling pressure decreases.

Even modest purchases can have a disproportionate impact when short sellers cover positions and traders on the sidelines re-enter cautiously. However, panic readings are not perfect timing tools: negative sentiment can persist if the overall market remains unstable or if there is no clear catalyst to change the narrative.

Onchain data repeats the pattern warning about 2022

What really concerns analysts is the structure of XRP holders, which is beginning to resemble that of early 2022, a period that preceded months of sustained weakness. The most recent buyers, accumulating between one week and one month ago, have cost bases below those of holders with six to twelve months of positions, creating a fragile dynamic.

A similar setup emerged in February 2022, when XRP traded near $0.78 before sliding for months to reach lows around $0.30 in mid-year. Today, with the current price at $1.89 and an all-time high of $3.65, the accumulated retracement from its peak represents a nearly 48% drop, a correction that is once again pressuring recent buyers.

What will be the next move?

The key now lies in how the price evolves in the coming days. If XRP stabilizes and begins to recover lost ground, pessimistic sentiment can quickly turn around and help drive the early stages of a rebound. Data shows that XRP ETFs in the United States attracted $91.72 million in net flows this month, a sign that underlying institutional interest remains despite volatility.

If weakness persists, the panic reading would simply be documenting a market still seeking a firmer base. The next 78 weeks projected over the coming months will be decisive in determining whether XRP consolidates a sustained recovery or faces additional downside pressure in search of lower support levels.