Data shows that negative sentiment surrounding XRP has seen a rise on social media, a sign that could even be bullish if history goes by.
XRP’s positive/negative sentiment has fallen
In a new after on X, analytics firm Santiment discussed the latest trend in positive/negative sentiment for XRP. This indicator measures the ratio of positive to negative comments related to the item that appear on major social media platforms.
The metric works by going through social media posts/comments/threads to separate those mentioning the cryptocurrency and running them through a machine learning model. This model classifies each message as ‘positive’ or ‘negative’. The indicator counts the number of responses in each category and determines the ratio between them.
When the positive/negative sentiment value is greater than 1, it means that bullish sentiment posts are dominant on social media. On the other hand, the fact that the metric is below the threshold implies that the majority of users on these platforms share a bearish mindset.
Here is the chart shared by Santiment showing the trend in XRP positive/negative sentiment over the past few months:
As shown in the chart above, XRP Positive/Negative Sentiment saw a huge spike earlier this month, implying that positive comments regarding the coin skyrocketed on social media platforms.
However, what followed this burst of optimism among retail traders was a drop in the cryptocurrency’s price. This pattern of assets going against public expectations is something that has been observed in digital asset markets throughout history.
Based on the historical trend, the analytics company has defined regions where the probability of a reversal becomes notable. The positive sentiment spike we saw earlier this year broke into the ‘greed zone’, which corresponds to the area where price corrections often occur.
Since the XRP price drop, sentiment among retail social media users has deteriorated rapidly, with positive/negative sentiment falling to a value of 1.01.
At this value, bearish comments are not yet dominant, but the fact that negative messages offset positive ones is still something to take into account. In fact, this value is firmly within Santiment’s ‘fear zone’, implying that the current level of bearish sentiment is already significant.
“Historically, this setup leads to price increases,” the analysis agency explains. “If the retail industry has doubts about a currency’s ability to rise, it makes the rise significantly more likely.” It now remains to be seen where XRP will go and whether retail sentiment will play a role.
XRP price
At the time of writing, XRP is hovering around $1.90, down 1.3% in the past 24 hours.