Here’s why the “very negative crowd sentiment” for XRP and SHIB could be bullish

TL;DR

The negative sentiment around XRP and SHIB could indicate a good buying opportunity as markets tend to defy crowd expectations at times. The meme coin shows potential for a rally due to positive factors such as Shibarium’s growth and reduced selling pressure. XRP and SHIB flash buy signal?

The cryptocurrency market witnessed a significant correction yesterday, with Bitcoin (BTC) briefly falling below $65,500. The sector recovered some of the losses in the following hours, but crypto analytics platform Santiment suggested that a growing number of industry participants believe the bull run has come to an end.

The entity also outlined the top 10 digital assets involved in the most bearish narratives on October 23 (the day of the last pullback). The top spot belongs to Chainlink (LINK), whose weighted sentiment dropped to -0.43. Bitcoin (BTC) ranks second with a ratio of -0.37, while Goateus Maximus (GOAT) ranks third (-0.35).

Other well-known cryptocurrencies on the list include Dogecoin (DOGE), Shiba Inu (SHIB), Pepe (PEPE), and Ripple (XRP).

While waning crowd optimism may sound like bad news for bulls, it could actually have the opposite effect. Santiment reminded that cryptocurrencies are highly speculative and their prices sometimes move in the opposite direction of people’s expectations.

“Markets tend to move in the opposite direction of the crowd’s expectations, meaning bearish narratives surrounding these coins can lead to rewarding results for those willing to go against the crowd’s selling that starts to increase,” said the platform.

Focusing on SHIB

There are many other factors that hint that the self-proclaimed killer Dogecoin could be ready for a short-term rally. An example is the booming meme coin sector, which is in the green on a daily scale. Some of their best results include cat-themed tokens like Popcat (POPCAT) and Cat in a Dogs World (MEW).

Another element is the resurgence of Shiba Inu’s Layer 2 blockchain solution: Shibarium. Daily transactions processed on the network have been in the millions in recent days, reaching early 2024 levels.

Finally, we will discuss SHIB net exchange flow, which has been predominantly negative (outflows exceeding inflows) over the past 30 days. This suggests a shift from centralized platforms to self-custody methods and could be seen as a bullish move due to reduced immediate selling pressure.

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