Data shows that social media sentiment about XRP has fallen to the third-worst level over the past two years, a sign that the public has turned bearish on the asset.
XRP’s positive/negative sentiment has decreased lately
This is evident from data from an analysis company in the chain Santimentthe positive/negative sentiment for XRP has plummeted. This indicator tells us how the level of positive sentiment surrounding a particular asset compares to that of negative sentiment on the major social media platforms.
The metric works by filtering out social media posts/threads/messages that contain mentions of the item and running them through a machine learning algorithm to distinguish between bullish and bearish comments. Then it adds the number of each and finds their ratio.
Here is the chart shared by Santiment showing the trend in positive/negative sentiment for XRP over the past few years:
As shown in the chart above, XRP’s positive/negative sentiment shot to high levels in December and January, implying that social media users became optimistic about a market turnaround after a lull in bearish momentum.
However, this optimism did not bear fruit as the price decline picked up again in late January. Although sentiment initially deteriorated following this decline, the dominance of positive messages returned, albeit to a significantly lesser extent than the previous highs. This suggests that social media users still haven’t turned completely bearish on the cryptocurrency.
That is, until last week rolled around. The chart shows that positive/negative sentiment for XRP has plummeted, a potential sign that the long-term consolidation has finally broken the trader’s belief.
Currently the statistic stands at 1.02, which indicates that there are about as many positive messages related to being active as there are negative messages. While this still doesn’t indicate an outright shift to bearish dominance, it is still a pretty low level compared to the past two years. “According to our weekly social data for crypto’s #4 market cap, FUD is at the third highest in the past two years,” the analytics firm said.
The two instances in this window where a bearish mindset was more dominant occurred in February and October last year. Both led to price increases. This is actually a pattern that has been observed time and time again in the digital asset markets: prices often move against the expectations of the majority.
The effect is generally strongest within the “FUD” and “FOMO” zones that Santiment highlights in the chart. The latest drop in positive/negative sentiment has pushed XRP into the first of the two regions. “Historically, when bullish commentary is replaced with this level of bearish commentary, the likelihood of a relief rally increases significantly,” the analytics firm explains.
XRP price
At the time of writing, XRP is hovering around $1.32, down 1% over the past seven days.