The data suggests that market sentiment around Solana (SOL) and bitcoin (btc) is currently negative, something that could benefit their prices.
Bearish crowd on Solana and bitcoin, while ethereum gets all the hype
As the chain analysis firm Santiment explains in a x.com/santimentfeed/status/1793087138919288978″ target=”_blank” rel=”noopener nofollow”>mail At x, investors have yet to become bullish on bitcoin and Solana despite their recent surge.
The relevant indicator here is “weighted sentiment,” which is based on two other metrics: sentiment balance and social volume. The first measures the net sentiment among cryptocurrency traders at the moment.
This indicator works by analyzing social media data and applying a machine learning model to differentiate between negative and positive posts about the asset. Then, use the difference between the two to determine which side is currently dominant.
The second metric of interest here, social volume, tracks the unique number of posts/messages/threads on social media platforms discussing a given asset. Basically, its value represents the degree of discussion the currency receives from social media users.
While the Sentiment Balance provides information about net sentiment in the market, it is not always useful as it says nothing about how many users actually share this opinion.
Weighted sentiment solves this problem by comparing sentiment balance to social volume. This means that the value of this indicator only increases in either direction when many publications discuss the asset, and the majority of them are positive or negative about the coin.
Below is a chart showing the weighted sentiment trend of three of the top cryptocurrencies in the sector: bitcoin, ethereum, and Solana.
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/05/Solana-and-Bitcoin-sentiment-remains-bearish-signal-to-buy.jpeg" alt="Weighted Solana and bitcoin Sentiment” width=”2493″ height=”1747″/>
The value of the metric appears to have been quite positive for eth recently | Source: x.com/santimentfeed/status/1793087138919288978/photo/1" target="_blank" rel="noopener nofollow">Santiment on x
As shown in the chart above, the weighted sentiment for bitcoin and Solana has been negative recently. Curiously, these red levels have persisted despite the fact that bullish winds were observed in their prices.
ethereum, on the other hand, has seen a large positive rise in the indicator, implying that many bullish posts related to the coin are spreading on social media.
This optimism behind the cryptocurrency is due to positive news regarding the likelihood of eth spot exchange-traded funds (ETFs) being approved.
Historically, market euphoria has been a bearish signal, as the price generally tends to move against the majority's expectations. Similarly, investor fear has been a positive sign that new rallies will begin.
As such, at least based on sentiment, bitcoin and Solana are more likely to see a rally than ethereum, which may be getting too hot.
SOL Price
With gains of over 19% over the past week, Solana is among the best performing coins by market capitalization. Currently, the price of SOL is around $177.
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Looks like the price of the coin has shot up over the last few days | Source: SOLUSD on TradingView
Featured image from iStock.com, Santiment.net, chart from TradingView.com
