Data shows that traders on social media are showing signs of euphoria right now, something that could cause a setback to bitcoin‘s rally.
bitcoin Social Volume Suggests Increasing Bullish Bias Among Investors
According to data from the on-chain analysis firm Holy, btc traders have turned bullish on social media after the latest price surge. The relevant indicator here is “social volume”, which tells us about the amount of discussion in which social media users participate in relation to a given topic.
The metric calculates this in terms of the unique number of posts/threads/messages that mention the term in question. By “unique”, what is meant here is that each post is counted only once, regardless of how many mentions it contains on the topic (as long as it contains at least one, obviously).
In the context of the current discussion, Santiment first used this metric for bitcoin-related terms to obtain information on all posts discussing the market and then filtered this social volume for keywords specifically related to sentiment.
To identify posts related to bullish sentiment, the company has chosen terms such as “bullish” or “buy.” Similarly, for bearish sentiment, keywords such as “bearish” or “sell” have been selected.
Here is a chart showing the trend in bitcoin social volume filtered for the two sentiments over the past month:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/10/Bitcoin-Traders-Show-Signs-of-Euphoria-Will-This-End-the.jpeg" alt="bitcoin Social Volume” width=”2766″ height=”1768″/>
The trend in discussions related to the two sentiments | Source: Santiment on X
As shown in the chart above, bitcoin social volume related to bullish terms has seen a notable increase recently, implying that FOMO among traders on social media has increased. Bearish sentiment, on the other hand, is not at such a high level right now.
Historically, majority sentiment has often played a role in btc‘s trajectory. Typically, the asset tends to move against investors’ expectations. The more the holders lean towards a particular sentiment, the greater the chance of a contrary move.
From the chart you can see that just at the beginning of the month, the bearish sentiment had reached some significant levels and what followed was the current rally of the cryptocurrency.
Similarly, the local high a few days ago also came as the market experienced a burst of optimism. As bullish sentiment has once again increased among social media users with the latest leg of the rally, another setback for btc is possible.
Such a pullback could only be temporary, as the previous one was, as long as the market euphoria fades with it. Santiment notes that for further upside, bitcoin FUD may need to see some rebound, so that an effect similar to the peak of bearish sentiment from earlier in the month can be recreated.
btc Price
bitcoin has become a bit stale following its explosive rise, as the asset is still trading around the $34,200 level.
<img decoding="async" class="alignnone size-medium aligncenter" src="https://www.tradingview.com/x/ONqDCACk/" alt="bitcoin price chart” width=”1534″ height=”869″/>
Looks like the price of the coin has moved sideways in the past couple of days | Source: BTCUSD on TradingView
Featured image by Kanchanara on Unsplash.com, TradingView.com charts, Santiment.net
