Investor sentiment on social media toward bitcoin, ether and XRP has turned broadly bearish. Some analysis suggests that the spread of pessimism could instead create conditions for a rebound.

On Nov. 11, blockchain media outlet CoinPost reported that crypto analytics firm Santiment said an analysis of online communities such as X, formerly Twitter, and Reddit found bearish views outnumbered bullish ones in all three assets.

The number of bullish comments per bearish comment was 0.82 for bitcoin, 0.88 for ether and 0.49 for XRP. A reading below 1 means there are more bearish views than bullish ones. For XRP, bearish comments were about twice bullish comments, making investor sentiment the weakest among the three.

The weakening sentiment coincided with a market pullback after the release of U.S. inflation data. The October consumer price index released on Nov. 10 by the U.S. Bureau of Labor Statistics came in above market expectations, sending bitcoin at one point below $73,000. Selling spread across major cryptocurrencies as expectations grew that an additional rate hike could take place at the December Federal Open Market Committee meeting.

Sentiment worsened especially for ether and XRP. On Nov. 3, the ratio of bullish to bearish comments was 0.69 for bitcoin, 1.14 for ether and 0.61 for XRP. Ether, which had more bullish views at the time, swung back to a bearish majority in just over a week, and pessimism also strengthened for XRP. Bitcoin recovered somewhat, but bearish views still outnumbered bullish ones.

Santiment said such pessimism could become a trigger for a rebound. It said big rallies often begin when investors cut losses out of fear and even question the possibility of a rebound, rather than when they broadly expect prices to rise. It also said a strong technical rebound could appear if bearish views continue to outnumber bullish ones among top market-cap assets.

Still, it is difficult to judge a bottom based on fear alone. Santiment said in its Nov. 3 analysis that extreme fear needs to be accompanied by price stability to become a more meaningful rebound signal. The key going forward is whether prices can stop falling and find stability as pessimism spreads.