Data shows that “buy the dip” calls for Bitcoin soared on social media following the drop the asset saw below the $66,000 level.
Bitcoin social volume for purchase-related terms has soared
According to data from the analysis company SanctionBitcoin investors have reacted more strongly with bullish calls than bearish calls despite the sharp decline the asset has seen.
The relevance indicator here is the “Social volume”, which tells us about the amount of discussion a particular topic or term is receiving on major social media platforms right now.
This metric works by analyzing the various posts/topics/messages on these sites to see if there are mentions of the topic. The indicator, however, does not count these mentions, but rather the number of posts that contain at least one mention.
Naturally, this is due to the fact that a high mention count alone cannot be a reliable indication of whether social media users as a whole are talking about the topic, since the conversation is limited to just a few topics. can also lead to an increase in this count.
In the context of the current discussion, Santiment filtered Social Volume for bullish and bearish keywords to find out how the two sentiments currently compare.
The chart below shows the metric trend for these terms since the beginning of the year 2024:
The value of the metric appears to have been quite high in recent days | Source: Santiment on X
To identify bullish sentiment, the analysis company used terms such as “buy” or “bullish”. Likewise, “sell” or “bear” are among the keywords for the opposite sentiment.
In the graph, it is visible that the Social Volume for the first type of terms exploded after the last dive in the price of Bitcoin, suggesting that social media users are seeing the drawdown as an opportunity to buy more.
Bearish Social Volume also saw an increase, but its peak was only half the value of one of the bullish terms. While bullish investor behavior may seem optimistic at first, the fact is that it has not been ideal for recoveries to occur in the past.
As Santiment notes:
Historically, the best dip buying opportunities occur when the crowd consensus shows a modicum of fear of further decline. This often causes small wallets to leave their bags for whales and sharks to collect.
As such, the current market enthusiasm may actually be counterproductive to the chances of a bottom to form. According to the analytics firm, the true “buy the dip” opportunity for Bitcoin could present itself once red sentiment catches up with blue.
BTC Price
At the time of writing, Bitcoin is floating around $65,700, down more than 7% over the past week.
Looks like the price of the asset has registered a sharp drop over the past day | Source: BTCUSD on TradingView
Featured image by Maxim Hopman on Unsplash.com, Santiment.net, chart from TradingView.com
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