Extreme Fear Grips XRP, but Market Signals Point to a Positive Setup

TL;DR (70 words total)

• Santiment said XRP re-entered “extreme fear” after a 19% drop from the Jan. 5 high, even as it traded near $1.95.
• XRP slid from $2.4 on Jan. 5 to $1.88 on Jan. 21, and Santiment said heavy bearishness has often preceded gains.
• XRP ETFs saw $7.16 million inflow on Jan. 21; BTC ETFs had $708.71 million outflow and ETH saw $286.95 million outflow.

XRP saw significant selling pressure as the wider crypto market reacted to US President Donald Trump’s tariff threats toward the EU. Santiment said social data pushed the token back into the “extreme fear” zone, similar to the sentiment seen on Jan. 2. The setup is paradoxical: bearish retail chatter is rising, even as price and activity hint at stabilisation. The report cited a 19% drop since the Jan. 5 high and put XRP around $1.95, up 2% in 24 hours, with volume up 22% to $4.3 billion. That divergence is the headline.

👍 According to our social data, XRP has fallen into 'Extreme Fear' territory. Small retail traders have become pessimistic toward the #5 market cap cryptocurrency after a -19% drop since the high back on January 5th. Historically, this high level of bearish commentary leads to… pic.twitter.com/T0ARoRNDWw

— Santiment (@santimentfeed) January 22, 2026

Fear signals, institutional flows, and an enterprise catalyst

The fear reading was not just abstract. XRP fell from a local high of $2.4 on Jan. 5 to $1.88 on Jan. 21, a drawdown the report linked to sustained selling pressure. Santiment’s point is that the crowd’s capitulation often marks the moment momentum quietly flips. The analysis said the same dynamic played out earlier this month: after retail pessimism peaked on Jan. 2, XRP regained bullish traction. In that framing, extreme fear becomes a contrarian signal, because heavy bearish commentary has historically preceded notable gains. That is the bullish setup.

While sentiment swung lower, institutional flows told a different story. US-based spot XRP ETFs logged net inflows of $7.16 million on Jan. 21, lifting cumulative net inflows to $1.39 billion. It added that the products have only recorded two outflow days so far, on Jan. 7 and Jan. 20. The notable contrast is that XRP-linked vehicles were attracting capital as BTC and ETH products saw material redemptions. On the same day, Bitcoin spot ETFs shed $708.71 million and Ethereum products posted $286.95 million in net outflows.

The institutional tilt was also reinforced by an enterprise partnership. Ripple, the company behind XRP, formed a strategic alliance with DXC Technology to integrate blockchain technology into banking systems, the report said. Ripple’s technology will be embedded directly into DXC’s Hogan core banking platform, which the report said supports over $5 trillion in deposits and 300 million accounts worldwide. The strategic implication is that enterprise integration can validate the stack even when token sentiment is stressed. For allocators, that mix of fear-heavy chatter and institutional traction can look like a positive setup.