ethereum has broken back above the $3,000 level after previous attempts ended in failure as FOMO took over from investors.
ethereum has rallied 3% in the last day to break above $3,000 again
Previously, ethereum had made two attempts to reach the $3,000 level, but both turned out to be short-lived as the asset quickly retreated to lower levels. In the last day, eth once again made an effort towards the mark, as the chart below shows.
<img decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/02/Ethereum-Breaks-Above-3000-Again-Will-FOMO-Reach-the-Top" alt="ethereum price chart” width=”1534″ height=”854″ loading=”lazy”/>
eth appears to have shot up in the past day | Source: ETHUSD on TradingView
In this latest surge, eth has seen a strong recovery of over 3% from around the $2,900 mark to current levels. The coin is now up 8% in the past week, making it the second-best performer among the top 10 cryptocurrencies, just behind BNB's 10% gains.
On the chart, you can see that ethereum is now about to set a new high for the year. But eth investors would wonder if this rally would sustain or if it would end up losing steam, just like the previous ones. If we go by the data, market sentiment may have been the reason behind the demise of the last few waves.
Previous eth surges peaked as FOMO took over for traders
According to data from the analytics firm Holy, the last high above $3,000 came as the crowd's euphoria skyrocketed. The indicator of interest here is “Social Volume,” which tracks the total number of discussions that social media users participate in around a given term or topic.
The metric calculates this value by counting the number of posts/threads/messages on major social media platforms that make at least one mention of the topic.
The following chart shows social volume data related to two ethereum topics:
<img loading="lazy" decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2024/02/Ethereum-Breaks-Above-3000-Again-Will-FOMO-Reach-the-Top.jpeg" alt="ethereum Social Volume” width=”2480″ height=”1761″/>
The Social Volume related to the latest surges | Source: Santiment on X
The first social volume here has leaked for $3000. As you can see from the chart, this metric spiked when eth surpassed $3,000 for the first time since April 2022 a couple of days ago.
This would suggest that discussions on the topic had spiked as traders celebrated the pause. However, as it turned out, the increase was rather short-lived.
On the second attempt, social volume related to terms like “buy ethereum” saw a large increase, implying that FOMO had developed among traders.
Historically, FOMO has been something that has made highs likely, as the price of eth has tended to go against crowd expectations. This is probably why the summit coincided with this peak.
A similar phenomenon occurred with the small recovery momentum observed yesterday, as Santiment highlights in the chart. It would seem that greed had once again led to the currency reaching its top.
It now remains to be seen how the market reacts to the latest rally above $3,000. If the FOMO around ethereum increases again on social media, then it may be a sign that this increase may also only be temporary.
Featured image by Kanchanara on Unsplash.com, Santiment.net, TradingView.com chart
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