Bitcoin has broken past the $41,000 level during the past day, but FOMO could be the number one danger to a further surge towards $50,000.
Bitcoin Social Dominance Has Spiked Following The Rally
According to data from the on-chain analytics firm Santiment, signs of euphoria have appeared among Bitcoin traders following the latest climb in the asset’s price.
The main indicator of interest here is the “social dominance,’ which is based on another metric called the “social volume.” This latter indicator basically tells us about the amount of discussion related to a given topic that is happening on the major social media platforms right now.
The metric tracks this by going through each post/thread on these platforms to see if they are making mentions of the topic or not. However, rather than counting the number of mentions themselves, it separates the posts and counts the total number of them instead.
Because of this approach, a more organic overview of the market becomes apparent, as the indicator will only spike when discussions are happening across social media, rather than inside just one or two large threads.
The social dominance compares this social volume of any given coin against that of the top 100 cryptocurrencies combined. Thus, whenever this indicator shoots up, it means that the mindshare related to the asset is going up among social media users.
Now, here is a chart that shows the trend in both the Bitcoin social volume and social dominance over the past year:
The value of the metric seems to have registered a large spike during the past day | Source: Santiment on X
As displayed in the above graph, the Bitcoin social dominance observed a huge increase when the Bitcoin price broke above $40,000 during the past day. This implies that users shifted focus toward BTC from the other coins after this rally.
While some attention is healthy (it’s even required, otherwise the move would become unsustainable), too much hype has often not turned out to be favorable for the cryptocurrency in the past.
An example of this is clearly visible in the chart, where the BTC rally hit its brakes back in March of this year after the social volume and social dominance both registered significant spikes.
Going by this, the current even higher values of social dominance could be a worrying sign for the asset’s hopes of rallying toward the $50,000 mark. Though, so far, BTC has still been able to continue its climb despite this development, as it has now broken past the $41,000 barrier as well.
In the end, it comes down to whether the discussions have a bullish or a bearish view. More of the latter would provide better chances for the rally to continue. As Santiment explains, “FUD & FOMO toward the ongoing ETF confirmation dates will dictate whether $50,000 arrives sooner rather than later.”
BTC Price
It would appear that Bitcoin isn’t done with its surge yet as the coin has now risen above $41,800, inching closer to $42,000.
BTC has enjoyed some sharp uptrend during the past day | Source: BTCUSD on TradingView
Featured image from Kanchanara on Unsplash.com, charts from TradingView.com, Santiment.net
