Jun 29, 2024 12:05
Solana has been showing a breakout over the last few days, but data shows crowd FOMO is rising, which could be a bad sign for the rally. Solana Social Volume Has Shot Up Alongside The Rally According to data from the on-chain analytics firm Santiment, the SOL social volume has observed a sharp increase following the recent recovery of cryptocurrency. The “Social Volume” here refers to an indicator that keeps track of the degree of discussion that any given asset receives on the major social media platforms. Related Reading: Retail Losing Interest In Bitcoin? Volume Plunges 30% This metric makes this measurement by counting up the unique number of posts/threads/messages, making at least one mention of the cryptocurrency. The indicator doesn’t simply count up the mentions themselves because sometimes a large number of mentions can crop up within a couple of posts, while at the same time, the discussion could be more or less dead on the rest of social media. The high mentions would suggest a lot of discussion in this case, but in reality, the talk is all contained within niche circles. By measuring the number of posts, the Social Volume can tell us about the trend across social media. Now, here is a chart that shows the trend in the Solana Social Volume over the past week or so: As is visible in the above graph, the Solana Social Volume has registered some rapid growth recently. This would imply that the intensity of discussions related to the asset has suddenly spiked. The driver behind this increase in the indicator is likely to be the rally that the coin’s price has enjoyed recently. In this new surge, SOL has recovered from a low of around $124 to the current $146 mark, meaning it has seen returns of almost 18% in just a few days. The Social Volume spiking alongside a rally isn’t unusual, as social media users find sharp price action exciting, so they participate in more discussions than normal. However, the scale of the spike that the metric has seen this time may be worth noting. Historically, the asset’s price has tended to move against the majority’s expectations, so too much excitement too suddenly can be a bearish sign for the cryptocurrency. In the same chart, Santiment has attached the Social Volume for Avalanche (AVAX) data, which has also witnessed a recovery run. It would appear that, unlike the Solana surge, few are paying attention to Avalanche’s rally, as the indicator’s value has remained relatively low. Related Reading: Bitcoin Near Euphoria Boundary: What Happens After A Breach? Therefore, AVAX’s rally could be more likely to be sustainable than SOL’s, as it has been seeing much less FOMO, at least according to the Social Volume. SOL Price Solana had broken past the $151 level yesterday, but the asset has since seen a minor pullback to $146. It’s currently unclear if this means that the negative effect of FOMO is already kicking in for SOL. Featured image from Shutterstock.com, Santiment.net, chart from TradingView.com
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