Data shows that bearish sentiment among ethereum investors has spiked as the asset’s price has fallen below the $1,600 level.
ethereum has fallen below the $1,600 mark recently
Earlier this month, ethereum enjoyed strong bullish momentum as the cryptocurrency reached the $1,750 level. However, since that peak, the coin has struggled as its price has fallen back below the $1,600 mark.
Yesterday, eth even briefly retested $1,550, but the asset quickly found a bounce and has remained above the level so far, as the chart below shows.
<img decoding="async" class="alignnone size-medium aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/10/Ethereum-FUD-Explodes-When-ETH-Is-Below-1600-Time-to" alt="ethereum price chart” width=”1534″ height=”869″/>
eth has registered a drawdown in the past couple of days | Source: ETHUSD on TradingView
However, the bounce has been small, meaning ethereum could be in danger of retesting the $1,550 level in the coming days. Something that may give clues as to whether more declines are coming could be investor sentiment.
eth Social Dominance Spike May Suggest Increase in Market FUD
According to data from the on-chain analysis firm HolyThe social dominance of the asset has seen a huge increase since the recent volatility occurred.
“Social dominance” here refers to an indicator that tracks the percentage of social media discussions related to the top 100 assets in the cryptocurrency sector that involve the topic of ethereum.
When the value of this metric is high, eth-related discussions make up a significant portion of the total industry-related discussions.
On the other hand, low values imply that cryptocurrencies don’t have much social media engagement right now, at least compared to other major assets on the market. Now, here’s a chart showing the trend of ethereum‘s social dominance over the past year:
<img decoding="async" class="alignnone aligncenter" src="https://technicalterrence.com/wp-content/uploads/2023/10/Ethereum-FUD-Explodes-When-ETH-Is-Below-1600-Time-to.jpeg" alt="ethereum Social Domain” width=”2734″ height=”1717″/>
The value of the metric seems to have spiked in recent days | Source: Santiment on X
The chart above shows that ethereum‘s social dominance has increased considerably this month. This increase in interest in the asset on social media first occurred with the price rally above $1,700, but the value of the indicator remained high even after the drop.
Generally, a large amount of chatter on social media after a crash is a sign of rising FUD in the market, as traders take to these platforms to express their panic over the cryptocurrency situation.
However, this bearish sentiment has often been positive for the asset’s price in the past. The graph shows that the March rally occurred when social dominance was at very high levels.
With the current value of the indicator, more than 10% of the discussions related to the top 100 assets are about ethereum. “The growing bearish sentiment is a good sign of an imminent change,” explains Santiment.
It remains to be seen if ethereum has already bottomed or if there is still more downside before eth can witness a rebound.
Featured image from iStock.com, TradingView.com charts, Santiment.net
