Data shows that social media users have reacted to the recent decline in the prices of Bitcoin and other cryptocurrencies by calling in to buy.
Bitcoin decline is worth buying according to crowds on social media
In new mail On X, on-chain analytics firm Santiment spoke about the sentiment on major social media platforms following a market-wide price drop.
The relevance indicator here is “social volume,” which tells us the total volume of discussion a particular topic or term receives from social media users.
This metric measures its value in terms of the number of posts/messages/topics that contain at least one mention of the topic. The reason the signals themselves are not counted is that some external posts with a large number of signals do not skew the data on their own.
Now, in order to determine investor sentiment, Santiment has filtered the cryptocurrency social folder using terms related to “buy” and “sell.” Below is the chart shared by the analytics company that shows the trend in the metric for these terms over the past month:
The value of the metric appears to have spiked for terms related to buying in recent days | Source: Santiment on X
As shown in the chart, the cryptocurrency social volume of buying-related terms has increased following the recent decline in the prices of Bitcoin and other assets.
At the same time, topics related to selling remained at much lower levels, indicating that social media users are so convinced of the downward move that it simply presents another opportunity to accumulate.
This is the fourth time in the past month that social media users have reacted to falling Bitcoin prices by calling in to buy more. Historically, excessive fear of missing out (FOMO) has been something that has sent cryptocurrencies soaring, but in the case of these recent spikes, the market has actually seen a rally following.
This trend is probably due to the fact that these calls to buy came only after prices fell and not during the rise. With another rise in the social volume of buying-related terms emerging, it is possible that the effect seen in the last few spikes will follow this time as well.
However, the indicator can still be monitored in the near future, as further market excitement in the event of a renewal of Bitcoin’s uptrend could bring about the bearish impact that FOMO has often been associated with in the past.
Bitcoin price
At the time of writing, Bitcoin is trading at around $96,900, up more than 2% over the past week.
Looks like the price of the coin has been sliding down over the last couple of days | Source: BTCUSDT on TradingView
Featured image from Dall-E, Santiment.net, chart from TradingView.com