XRP, Dogecoin, and Shiba Inu All Seeing Bad Sentiment: A Signal to Buy?

The data shows that social media users have been showing negative sentiment towards XRP, Dogecoin, and Shiba Inu after their entry in the previous day.

FUD Focused Traders Towards These Altcoins After Recent Crash

According to data from analytics firm Santiment, sentiment around XRP (XRP), Dogecoin (DOGE), and Shiba Inu (SHIB) has dropped significantly recently.

The index of interest here is “Nation Weight,” which derives its value from two other metrics: Emotional Balance and Community Volume. The first of these, Sentiment Balance, goes through posts/threads/messages related to a particular cryptocurrency on major social networks and puts them through machine learning.

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This model is able to identify and distinguish between negative and positive posts. The Sentiment Balance then takes the difference of these inputs to get the overall market sentiment.

Another relevant indicator here, Social Volume, keeps track of the level of discussion a particular asset receives on social media. The metric value represents the unique number of posts that mention at least one of the coin.

Although the Sentiment balance alone tells us what the majority of sentiments are on social media right now, it does not contain information on how many users share this sentiment.

Activity on these forums can fluctuate and sometimes only a few posts around a given cryptocurrency may appear. Even if all these positions are bullish, it is difficult to say that they represent what the market as a whole is thinking.

Weighted Sentiment fixes this problem by taking the Balance of Sentiment and weighing it with Public Volume. With this correction, the index only shows a strong dominance in any direction where not only the total sentiment has a high dimension, but also a large number of posts revolve around the material.

Now, here is a chart showing the latest trends in this index for three altcoins: XRP, DOGE, and SHIB.

As shown in the graph above, Weighted Sentiment has recently entered negative territory for all three XRP, Dogecoin, and Shiba Inu. This decline in the index came as the prices of these commodities fell.

Naturally, these negative values ​​mean that social media traders have become bearish towards these assets. This FUD, however, can actually be useful for coins.

Historically, cryptocurrencies tend to go against what most expect. As such, with Weighted Sentiment at negative levels, XRP and others may be close to hitting the bottom.

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“Patient traders who have been waiting for the crowd to stop in these major altcoins may have an opportunity to buy out of FOMO in 2024,” Santiment noted.

XRP price

XRP has seen the price drop to $0.49 after seeing a 6% drop in the past few weeks.

Featured image from Shutterstock.com, Santiment.net, chart from TradingView.com