XRP has come under strong pressure after a price correction, but on-chain and market data are starting to send mixed signals. Extremely bearish sentiment among retail investors and negative funding rates have historically often preceded a trend reversal. An additional factor supporting the narrative of a possible rebound is the recent decisions by Binance and signals from technical analysis. Analysts indicate that the market may be preparing for another dynamic price movement.
In this article, we discuss the key factors behind such a position. The analysis is based on social data, trading activity, and recent events on exchanges.
Retail investor sentiment is turning bearish during the price correction of XRP
XRP has experienced a sharp change in sentiment.
Data on positive/negative sentiment from the Santiment platform, which analyzes market sentiment based on social media discussions, shows that XRP has entered the “extreme fear” zone. Just a week earlier, the same indicator signaled greed.
Santiment notes that historically extreme sentiment levels often indicate potential turning points. Markets usually move against the expectations of the majority.
The analytical platform highlighted:
“Historically, such a high level of negative comments leads to rallies. Prices most often move in the opposite direction to retail expectations.”
This observation suggests a constructive scenario. However, the rapid change in sentiment over a short period shows uncertainty and inconsistency among retail investors. Such instability usually does not favor long-term growth.
Negative funding rates signal a potential reversal pattern
Market data indicates a possible signal of a trend reversal. CryptoQuant analyst noted negative funding rates in perpetual contracts, indicating an excessive number of short positions.
Funding rates are periodic payments between holders of long and short positions in the perpetual futures market. Negative rates mean that short sellers pay long holders. Historically, similar conditions have often preceded price rebounds for XRP.
Moreover, data from CryptoQuant shows that this pattern has appeared twice since 2024 — in August–September 2024 and in April 2025. In both cases, negative funding rates preceded significant price rebounds. CryptoQuant analyst Darkfost explained:
“Historically, the market tends to move against the delayed consensus. An accumulation of short positions creates short-term selling pressure, but also creates hidden buying pressure. If prices start to rise, these positions may get liquidated, which will drive the increase.”
Binance adds trading pairs XRP/RLUSD, increasing volume
Additionally, positive news from the exchange market further strengthens the outlook for XRP. On January 21, 2026, Binance announced the introduction of a new trading pair XRP/RLUSD.
Ripple CEO Brad Garlinghouse expressed optimism regarding this move. Trading RLUSD on Binance allows the stablecoin to reach a wider audience. This expansion strengthens the XRP Ledger ecosystem and may indirectly support the price of the Ripple token.
The new pair also increases liquidity for both the altcoin and RLUSD. In the long term, under favorable market conditions, deeper liquidity can improve market depth. It will also affect reducing price volatility and may attract new capital.
BeInCrypto's technical analysis additionally indicates a bullish divergence when XRP fell below 2 USD. This signal improves the outlook for a short-term rebound.
To check out the latest cryptocurrency market analysis from BeInCrypto, click here.
