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XRP and Ether bulls are getting louder as prices fall, signaling more trouble ahead

Retail traders are piling into XRP and ether while both tokens slip, the kind of crowd behavior that more often precedes further downside than a bounce.

XRP drew 3.02 bullish social media comments for every bearish one on Monday, its most positive reading in five weeks, according to Santiment. Ether ran at 2.31 and bitcoin at 1.40, which the firm classified as neutral. Bitcoin and ether both opened higher and faded through the day, so the loudest enthusiasm is landing on the assets that are falling.

Sentiment readings like these are used as contrarian signals, because crowd excitement usually peaks near local tops.

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"Crypto typically moves opposite to what the crowd is loudly expecting," Santiment wrote, adding that heavy bullishness on XRP or ether while prices dip can add short-term downside risk or slow any rebound.

Bitcoin's flat reading is the healthier one, meanwhile. Retail chasing the smaller tokens while staying neutral on bitcoin is narrow speculation, not broad greed, and rallies have more room when the crowd hasn't already crowded into the higher-prices trade. XRP traded near $1.09 on Monday, down on the week.

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CoinDesk Analysis Team

CoinDesk is the media platform for the next generation of investors exploring how cryptocurrencies and digital assets are contributing to the evolution of the global financial system.

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