Market Narrative or Trading Trap? Why Some Investors Fall for Speculative Assets

XRP’s performance tells a compelling story of market psychology and the dangers of narrative-driven investing. Currently trading at $2.07 with a 1-year decline of 17.54%, the digital asset paints a stark contrast to the optimistic forecasts that fueled earlier rallies. This divergence between expectation and reality highlights a critical question: what drives investors to maintain conviction in assets that consistently underperform?

The Psychology Behind Speculative Conviction

Renowned market technician Peter Brandt recently offered a blunt assessment of retail investors backing XRP and precious metals like silver, characterizing them as participants prone to misreading market signals. With nearly 841,000 followers on X, Brandt’s perspective carries weight in trading circles. His skepticism extends back decades—he has maintained reservations about silver since 1975, when prices stood at $5 per ounce, providing a historical lens through which to evaluate long-term conviction versus temporary enthusiasm.

The XRP Rally That Wasn’t Sustainable

Between late 2024 and mid-2025, XRP experienced a dramatic 630% appreciation, triggering waves of retail optimism. However, the subsequent correction has reversed most of these gains, with the asset now in negative territory for the year. Current trading volumes of $101.52M reflect waning interest as price action contradicts bullish narratives.

Why Conviction Persists Despite Evidence

Ripple’s ongoing regulatory struggles with the SEC have done little to dampen enthusiasm among core supporters. This phenomenon—maintaining bullish positioning despite legal headwinds and technical deterioration—exemplifies how narrative momentum can override fundamental concerns. The fear and greed index reveals conflicting signals in market sentiment, while declining volume accompanying price weakness suggests that conviction is narrowing rather than broadening.

The Broader Lesson

Whether in XRP or silver, assets that attract participants driven primarily by “what if” scenarios rather than fundamental analysis tend to disappoint over extended timeframes. Market psychology favors those who recognize when narrative has stretched beyond reality.