Data shows investors on social media urged buying during Bitcoin’s recent dip below $66,000, a sign of FOMO activity in the market.
Bitcoin investors are showing FOMO after the recent decline
As noted by the analytical company Santiment in a up-to-date edition post on
The interest indicator here is “Social Volume,” which tracks the amount of discussion related to a given topic or term in which users of major social media platforms participate.
This metric measures this by counting the unique number of posts/threads/messages on these platforms that mention at least one keyword.
The reason the metric counts posts rather than just mentions is that sometimes there can be a gigantic number of mentions on social media. Still, the location of these mentions may be narrow in niche circles.
The total number of posts mentioning a topic increases dramatically as users on broader social media also interact with the term. As such, social volume can provide a more exact representation of the actual level of conversation surrounding a keyword.
In the context of the current discussion, Santiment used this indicator to determine data related to the conditions associated with buying and selling Bitcoin. The chart below shows how social volume has changed for these two topics over the last month or so.
As you can see in the chart above, the total social volume of phrases related to “buy Bitcoin” has just seen a large raise. This pointed raise in the indicator occurred as the price of the cryptocurrency dropped.
It would seem that social media users think this dip is worth purchasing. The chart shows that the scale of this buying interest is the largest seen in the market since BTC surged above $70,000 last month.
However, it is also clear that BTC peaked shortly after the surge in social volume. This pattern has often been observed as the likelihood of a price correction becomes more likely when FOMO takes over the crowd.
Generally speaking, any negative effects of FOMO can be offset if enough FUD enters the market at the same time. However, as highlighted in the chart, social volume for “Bitcoin selling” terms remained low amid a surge in buy calls.
As such, the high level of optimism around the payout may suggest that the bottom is likely not yet here for the cryptocurrency.
BTC price
It appears that the bearish effect of social media FOMO may already be having an impact on Bitcoin as its price saw a further decline below $66,000 following a surge in social volume.
Featured image from Dall-E, Santiment.net, chart from TradingView.com
