Bitcoin has observed a retrace from its new all-time high after users on the major social media platforms displayed overexcitement.
Bitcoin FOMO On Social Media Spiked During Recent Rally
In a new post on X, the analytics firm Santiment has talked about how social media reacted to the recent Bitcoin rally to the new all-time high. Whenever volatility emerges in the market, users on these platforms start sharing about which levels they think the price would visit next. This latest one was naturally no exception.
To gauge how many users called for which price levels, the analytics firm has made use of the “Social Volume” indicator. This metric keeps track of the total number of posts/threads/messages on the major social media platforms that are making at least one mention of a given term or topic.
The reason that the indicator doesn’t simply count up the mentions themselves is so that a few outlier posts containing thousands of mentions don’t skew the data by themselves. In order to narrow the data down to posts related to Bitcoin price calls, Santiment has entered certain price levels alongside BTC-related terms into the Social Volume.
The analytics firm has divided the price targets into three groups: levels above the current one, levels below it, and levels around it.
Below is a chart showing the trend in the Bitcoin Social Volume for these over the past month and a half:
As is visible in the graph, the combined Bitcoin Social Volume for the prices between $110,000 and $119,000 witnessed a large spike alongside the price rally, suggesting that the social media users were optimistic about the cryptocurrency continuing its bullish momentum and exploring the higher levels next.
The bets of these users have failed so far, though, as the asset has seen a retrace since their mentions have appeared. From the chart, it’s apparent that this is actually a trend that BTC has shown in the past as well.
“Prices historically move the opposite direction of the crowd’s expectation, particularly in the short-term,” notes Santiment. “Being a contrarian continues to be a profitable way to swing trade, and an easy way to do so is to look at mentions of lower prices, current prices, and higher prices.”
Just like how market hype leads to tops for Bitcoin, pessimism can result in bottoms. The price recovery run during the past week kicked off after social media users started expecting a bearish outcome.
Thus, the Social Volume of these terms could be to keep an eye on in the coming days, as another spike in posts mentioning the lower price targets could end up being a positive sign for the rally.
BTC Price
At the time of writing, Bitcoin is floating around $104,500, up almost 9% in the last seven days.
