XRP Market Fear Hits Levels That Previously Triggered Relief Rallies

XRP derivatives traders are leaning bullish. Open interest in XRP futures jumped more than 1% in 24 hours to $2.86 billion, with activity climbing on both CME and Binance, signaling that traders with real money on the line are betting on a move up.

A Familiar Pattern In The Data

On-chain analytics firm Santiment flagged a shift in crowd mood on May 26, pointing out that the bullish-to-bearish comment ratio on social media had slipped to 1.1:1.

That places sentiment at its most fearful in three weeks, a level that has historically been followed by short-term price stabilization or a bounce.

Santiment’s reasoning is straightforward: when fear peaks, weak hands have already exited, and whales or institutions tend to step in and absorb the sell pressure.

XRP was trading at $1.33 at the time of reporting, up about 1% from a 24-hour low of $1.32. Volume climbed 5% over the same period, adding some weight to the uptick.

On the daily chart, the token is still below its 50-day, 100-day, and 200-day moving averages, and the Relative Strength Index is sitting near 41. A break above a multi-month trendline, reports indicate, could open the door toward $1.50.

Ripple And Circle Rumors Swirl

Much of the chatter swirling around XRP on Monday centered on a possible acquisition. Speculation spread that Ripple is preparing to buy stablecoin issuer Circle at a price tag of $11 billion.

The rumor was traced back to a post by the XRP Ledger Foundation on X that simply read: “Tomorrow’s going to be a great day.” No executives from either company have addressed the speculation.

This is not the first time such a rumor has surfaced. Ripple CEO Brad Garlinghouse publicly denied a Bloomberg report last year that said Ripple had pursued Circle at a valuation of $4 to $5 billion.

Circle, for its part, said it was not for sale and was focused on its IPO. Reports suggest the XRP Ledger Foundation’s post was more likely connected to a major XRPL mainnet upgrade scheduled for May 27.

Adding another thread to the day’s activity, wallets linked to Ripple co-founder Chris Larsen were reported to have become active again, with the timing drawing attention ahead of US midterm elections. No further details about the transactions were immediately available.

Santiment noted that the opposite dynamic tends to play out during periods of heavy optimism, when the bullish-to-bearish ratio climbs into what it calls the FOMO zone, whale activity tends to fade and prices often pull back.

Featured image from Gemini, chart from TradingView