Data shows the sentiment around Ethereum (ETH) has recently soured on social media, something that could actually help the coin reverse its price.
Ethereum Positive/Negative Sentiment Has Declined Recently
According to data from the analytics firm Santiment, traders on social media have become bearish toward Ethereum following the price drawdown. The indicator of relevance here is the “Positive/Negative Sentiment,” which tells us about whether the social media users are bullish or bearish toward a given coin.
The metric works by going through the major social media platforms to filter for posts/threads/messages that contain at least one mention of the asset. It then puts these posts through a machine-learning model to determine whether the comments are positive or negative.
Finally, the indicator takes the ratio between the two types of posts, in order to represent a ‘net’ situation for traders as a whole. This metric’s value being greater than 1 implies positive posts outpace the negatives ones, while it being under the mark suggests a bearish sentiment is held by the majority.
Now, here is the chart shared by the analytics firm that shows the trend in the Ethereum Positive/Negative Sentiment over the last few months:
Looks like the value of the metric has slipped under the 1 level in recent days | Source: Santiment on X
As displayed in the above graph, the Ethereum Positive/Negative Sentiment witnessed some very large spikes during the last couple of months of 2024. The peak of the metric during that period corresponded to positive comments outweighing negative ones by more than three times.
The overwhelming bullish sentiment was a result of the sharp rally that ETH observed alongside the rest of the cryptocurrency sector. Interestingly, the run ran out of steam not too long after optimism spiked among the social media users.
This pattern of the ETH price moving contrary to the expectations of the majority has actually been witnessed time and again, not just for ETH, but digital assets in general.
From the chart, it’s visible that with the bearish price action that has followed in the last couple of months, the Positive/Negative Sentiment has seen a notable cooldown.
After the latest continuation of the decline, that has taken Ethereum under the $2,000 level, the indicator’s value has dropped below the neutral 1 mark, indicating the traders on the social media platforms now believe in a bearish outcome for the asset.
As mentioned before, though, it’s been a historical pattern that the coin’s price tends to go opposite to the crowd’s opinion. Thus, in this view, the dominance of fear on social media could be something that can help ETH attain a bottom.
It only remains to be seen, however, whether the current sentiment is negative enough for this effect to take hold, or if the mood will have to worsen still for a rebound to occur.
ETH Price
At the time of writing, Ethereum is floating around $1,900, down more than 13% in the last seven days.
The trend in the price of the coin during the last month | Source: ETHUSDT on TradingView
Featured image from Dall-E, Santiment.net, chart from TradingView.com
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