XRP Price Fear Explodes Again, But Analyst Says There’s More to the Story

XRP dropped from $1.3267 to $1.2993 over the past 24 hours, briefly falling to $1.2931 after heavy selling pressure triggered a breakdown below the $1.3150 support zone during the May 27 23:00 UTC session, where nearly 64 million XRP traded. Although the token later recovered slightly toward the $1.30 level, XRP’s sharp price swings continue fueling debate across the crypto community as traders wait for the asset to deliver a major breakout. 

Amid the latest fear, crypto analyst CryptoWendyO pushed back against what she called misleading XRP narratives, arguing that many reports are comparing current weakness to December 2020 without explaining the context behind that period. She said bear markets often lead traders to react emotionally instead of thinking critically. 

One major report from Santiment claimed the average XRP trader active over the past 30 days is down roughly 47%, while XRP’s 30-day MVRV ratio has dropped to its lowest level since December 2020. She explained that the MVRV metric measures whether holders are sitting in profit or loss.

However, she noted that XRP holders are historically long-term investors because of Ripple’s strong institutional ties and real-world payment utility.

Liquidity Warnings and Market Weakness

The analyst also addressed recent reports from CryptoSlate claiming XRP is trapped in a dangerous volatility setup as Binance liquidity drops to its lowest level since 2020.

According to the report, thin liquidity combined with rising leverage could trigger a massive move in either direction. A breakout higher could force a short squeeze, while another breakdown could lead to aggressive liquidations and a sharper crash.

At the same time, XRP sentiment reportedly entered “extreme fear” territory after the token slipped below the $1.35 level.

Still, she argued that broader market conditions are also pressuring crypto, pointing to Bitcoin retesting the $74,000 support zone following heavy volatility tied to Bitcoin ETF flows.

What Really Happened in December 2020?

Moreover, she reminded viewers that December 2020 was a completely different situation for XRP because it involved the SEC lawsuit against Ripple.

On December 22, 2020, the SEC accused Ripple executives Brad Garlinghouse and Chris Larsen of raising $1.3 billion through unregistered XRP sales. Following the lawsuit announcement, XRP collapsed from around $0.54 to nearly $0.17.

She described the lawsuit as a “black swan event” that blindsided the market.

The analyst argued that today’s XRP situation is much stronger because Ripple has expanded institutional partnerships, pushed deeper into cross-border payments, pursued banking ambitions, and secured a major legal victory confirming XRP is not a security on secondary markets.