Will resistance rebound with a $2 drop?

The social sentiment for XRP (XRP) has entered the “fear zone”, this phenomenon was preceded by strong rallies in the past.

Main Receptors:

Social sentiment for XRP has historically entered the “fear zone” levels that precede strong rallies.

XRP price needs to close above $2 on the daily chart to open a path to $2.50.

XRP sentiment has fallen

Market intelligence platform Sentiment said on Monday that “XRP is seeing more negative social media comments than average,” which “raises the possibility of a strong price rebound.”

RELATED: Three data signals that indicate XRP trader interest are analyzed

The table below shows that the last two times this was low from the fear of the public, November 21 and December 5, and the price of XRP immediately increased by 22% and 11% in a few days.

“Historically, this setup results in price increases,” Santiment added.

“When retail is in doubt about the potential for a penny to rise, it becomes much more likely that it will rise.”

XRP fell 1.8% to $1.85 in the last 24 hours, down 49% from its seven-year high of $3.66.

Crypto analysts agree with Satiment that XRP's drop is not necessarily boring.

“XRP's sentiment is ugly again. But the currency doesn't look scary,” analyst DefyPeniel said in a recent X analysis of absolute flows into spot ETFs since its launch.

According to Cointelegraph, these investment products exceeded $1.2 billion in assets under management with aggregate revenue of $1.13 billion.

This will strengthen long-term confidence from institutional investors despite the “dull” price action, DeFipeniel added.

“Markets don't go down when sentiment improves, they go down when prices hold and sentiment breaks.”

XRP key price levels to watch

XRP needs to break through the resistance at $1.92 at the multi-month low to increase the chances of a sustained recovery.

According to Glassnode's cost base distribution heatmap, the next major resistance sits between $1.96 and $2.00, with investors gaining $1.5 billion in XRP.

The $2.10 to $2.50 area will be challenging for any recovery efforts. Note that this is where all the major moving averages sit: the 50-day Simple Moving Average (SMA) at $2.10, the 50-week Exponential Moving Average (EMA) at $2.25, and the 50-week SMA at $2.50.

The XRP/USD pair is “still in a strong downtrend. The price has been rejected several times at $2.50-$2.70 (200 SMA and downtrend line),” said X user C3_trading in a recent X post.

The analyst added that the technical bias will remain bearish until a critical breakout from the descending channel is achieved.

The accompanying chart shows that the upper boundary of the channel is positioned around $1.92-$1.96, which should be broken to end the downtrend.

“Wait for a break above $2.50 for a trend change, otherwise expect to continue.”

Meanwhile, the bears will try to keep the $1.92 resistance in place, and then pull the price below $1.80. The next target below is $1.75 (reached on December 19) and the April low of $1.61.

According to Cointelegraph, losing the $1.61 support increases the possibility of XRP falling to $1.25 and then to psychological support at $1 in 2026.

This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision. While we strive to provide accurate and up-to-date information, Cointelegraph does not guarantee the accuracy, completeness or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph shall not be liable for any loss or damage arising from reliance on this information.