Bitcoin
Social media users calling to buy under $66,000
Data shows that traders on social media have been calling to buy during Bitcoin’s latest drop below $66,000, a sign that FOMO is active in the market.
Bitcoin Investors Are Exhibiting FOMO After Recent Decline
As analytics firm Santiment pointed out in a new publish on X, the recent drop in cryptocurrency has instigated the second-largest increase in buying interest among social media users in the last two months.
The indicator of interest here is the “Social volume”, which monitors the amount of discussion related to a topic or term that users of major social media platforms are participating in.
This metric makes this measurement by counting the unique number of posts/threads/messages on these platforms that mention at least one keyword.
The reason the indicator counts posts and not mentions themselves is that sometimes a large number of mentions can appear on social media. Still, the location of these mentions could be restricted to niche circles.
The total number of posts mentioning a topic only increases when users on broader social networks also engage with the term. As such, Social Volume can provide a more accurate representation of the actual degree of conversation related to the keyword.
In the context of the current discussion, Santiment used this indicator to identify data related to terms related to the purchase and sale of Bitcoin. The chart below shows how the social volume of these two topics has changed over the last month.
As visible in the graph above, the combined social volume of phrases related to “buy Bitcoin” has just seen a huge increase. This sharp increase in the indicator occurred when the price of the cryptocurrency was going down.
It appears that social media users believe this drop is a worthwhile purchase. The chart shows that the scale of this buying interest is the largest witnessed in the market since BTC’s rally above $70,000 last month.
It is also apparent, however, that BTC peaked not soon after the increase in social volume. This has often been the observed pattern as price becomes more likely to correct when FOMO takes over the crowd.
Generally, any negative effects of FOMO can be negated if a sufficient amount of FUD also appears on the market simultaneously. However, as highlighted in the chart, the social volume of terms related to “sell Bitcoin” remained low amid the increase in buy calls.
As such, this heightened optimism surrounding the drawdown could suggest that the bottom may not have yet arrived for the cryptocurrency.
BTC Price
It appears that the bearish effect of social media FOMO may already be influencing Bitcoin, as its price has fallen further below $66,000 following the increase in Social Volume.
Featured image by Dall-E, Santiment.net, chart by TradingView.com