XRP Falls 19% Since January 5 as Market Sentiment Hits Fear Zone

XRP is under heavy pressure. The token has fallen around 19% since January 5. Price dropped from near $2.40 to below $2.00 in just over two weeks. According to data from Santiment, XRP has now entered the “extreme fear” zone. 

This means social media chatter has turned strongly negative. Retail traders are worried and many expect more downside. Cointelegraph shared the update that shows fear levels are now at a point last seen during earlier market sell-offs. But history tells a different story. In past cycles, extreme fear often came right before major rebounds.

Fear zones often signal surprise rallies

Santiment’s data shows a clear pattern. When XRP sentiment hits extreme fear, prices often move in the opposite direction. During 2023 to 2025, similar fear levels acted as contrarian buy signals. On average, XRP rallied around 25% within two weeks after entering the fear zone. This happened several times: January 2, January 18, and again in January 20-21.

🚨 NEW: XRP hits "Extreme Fear" after a 19% drop since January 5th.

Historically this high retail pessimism signals potential rallies as prices move opposite to expectations, per Santiment. pic.twitter.com/wWUw9C1lmx

— Cointelegraph (@Cointelegraph) January 22, 2026

Each time, retail traders sold in panic and each time, smart money stepped in. Now, XRP is once again sitting at a sentiment low. That doesn’t guarantee a rebound but it suggest that downside momentum may be slowing. In crypto, fear often creates opportunity.

Network activity stays strong despite sell-off

Even with falling prices, XRP network activity remains strong. Daily trading volume stands near $4.3 billion. On-chain transactions have crossed 1.3 million per day. This shows that users are still active and liquidity is still flowing.

At the same time, Ripple has launched its new USD stablecoin, RLUSD. The token started spot trading on Binance today with zero fee trading pairs. This move adds more liquidity to the XRP ecosystem. It also strengthens Ripple’s position in global payments. Also, Ripple CEO Brad Garlinghouse spoke at Davos this week. He highlighted Ripple’s growing role as a bridge between crypto and traditional finance.

Meanwhile, short term holders appear to be accumulating. Technical charts show support forming between $1.78 and $1.92. These signs suggest that sellers may be running out of strength.

ETF market shows mixed signals

XRP ETF market is showing mixed flows. There are now seven spot XRP ETFs live. Total assets under management stand at $1.54 billion, around 783 million XRP are locked in ETF vaults. However, Week 4 saw net outflows of 24.36 million XRP. That equals about $47.5 million leaving funds. Daily ETF trading volume remains healthy. Funds from Bitwise, Grayscale, Franklin Templeton and others continue to see steady interest. This shows that institutions remain active but they are cautious.

They are watching macro trends. They are watching Bitcoin and regulation. Currently, XRP trades like a high risk asset. It reacts fast to fear and it moves fast on hope. Right now, fear is in control but history says fear never lasts forever. If sentiment flips, XRP could surprise traders once again. In crypto, the crowd is often wrong and when everyone feels scared, the market usually gets ready to move.