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The crypto market saw a dip today, and it looks like social media users reacted with calls to buy this “dip.”
Crypto Sector Coins Are In The Red Today
The relevant indicator here is the “social volume”, which tracks the number of unique posts/threads/messages across different social media platforms mentioning a specific topic.
The metric counts posts themselves instead of mentions, as this method provides a more accurate representation of the behavior of overall social media users.
Consider two scenarios: one in which a large number of mentions occur across a few posts and another in which mentions also occur but are spread across a large number of posts.
In the first, the discussion is limited to a specific group of users, but given the mentions, this case would have as much interest for the subject as the second although this is not the case.
Now, to find out if “buying the dip” is gaining traction among crypto investors, Santiment first filtered crypto social volume and then searched those articles for mention of terms related to this idea.
Here’s a chart that shows the social volume trend for this topic over the past month:
The value of the metric appears to have spiked recently | Source: Santiment on X
The chart shows that crypto social volume for terms related to “buy the dip” skyrocketed after this market drop. In the same chart, the analytics company also attached the “social domination” data, which tracks the percentage of these discussions that add up.
Social dominance has also seen a spike recently, and at the peak of that spike it appears the metric took a value of around 0.7, meaning that 0.7% of all discussions related to the social industry cryptography involved this subject.
“Crypto saw its fastest decline in 4 months as markets corrected and caused slight concerns among traders,” notes Santiment. “There is a high level of buying calls, which usually means there is a bit of overeagerness and FOMO on these low prices.”
Even if the market is optimistic about this fall, too much optimism about things like “bottoms” has historically backfired on asset prices. So, these mentions do not mean that Bitcoin and others have ended their decline, and more could potentially be on the way.
Bitcoin had fallen below $41,000 during its initial plunge, but it did not take long to recover towards the current price.
Looks like the value of the asset has plunged | Source: BTCUSD on TradingView
Featured image from iStock.com, charts from TradingView.com, Santiment.net