Bitcoin FOMO: Social Media Users Encouraging Buying on Dip Below $66,000
Data reveals that social media traders have been urging others to buy during the recent Bitcoin dip below $66,000, indicating a prevailing FOMO sentiment in the market. According to analytics firm Santiment, this decline has triggered the second-largest surge in buying interest on social media platforms in the past two months.
Santiment utilizes the “Social Volume” metric to track the level of discussion related to a particular topic or keyword on major social media platforms. Rather than tallying mentions, this metric counts the unique number of posts, threads, or messages that include at least one relevant keyword. By doing so, it provides a more accurate representation of the actual degree of conversation revolving around the keyword.
In this case, Santiment analyzed data related to terms associated with buying and selling Bitcoin. The results demonstrated a significant spike in the combined Social Volume for phrases like “buy Bitcoin” coinciding with the cryptocurrency’s declining price. This surge in buying interest is the largest observed since Bitcoin’s rally above $70,000 last month.
However, it is worth noting that Bitcoin’s price often experiences a correction shortly after such a spike in Social Volume. This suggests that FOMO-driven buying may contribute to the market’s volatility. In order to counteract the negative effects of FOMO, a sufficient amount of FUD (fear, uncertainty, and doubt) needs to emerge concurrently. Yet, the Social Volume for terms related to “sell Bitcoin” has remained low, indicating a lack of pessimism during this buying surge.
Consequently, the high level of optimism surrounding the recent dip may indicate that the cryptocurrency has not yet reached its bottom. As expected, Bitcoin’s price has continued to drop below $66,000 following the spike in Social Volume, suggesting the bearish impact of social media FOMO.