Solana has shown an advance in recent days, but data shows that crowd FOMO is increasing, which could be a bad sign for the rally.
Solana’s social volume has soared along with the rally
According to data from on-chain analytics firm SanctionSOL social volume has seen a sharp increase following the cryptocurrency’s recent rally.
O “Social Volume” here refers to an indicator that tracks the degree of discussion any asset receives on major social media platforms.
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This metric does this measurement by counting the unique number of posts/threads/messages making at least one mention of cryptocurrency.
The indicator does not simply count the mentions themselves because sometimes a large number of mentions can arise on some posts, while at the same time the discussion may be more or less dead on the rest of the social networks.
The big mentions would suggest a lot of discussion in this case, but in reality the conversation is all contained in niche circles. By measuring the number of posts, Social Volume can tell us about the trend on social media.
Now, here is a chart showing the trend of Solana Social Volume over the past week:
As visible in the chart above, Solana Social Volume has recently seen rapid growth. This would imply that the intensity of discussions related to the asset has suddenly increased.
The factor underlying this increase in the indicator will probably be the race that the coin’s price has enjoyed recently. In this new surge, SOL has recovered from a low of around $124 to the current mark of $146, meaning that it has seen returns of almost 18% in just a few days.
Increased social volume alongside a rally is not uncommon, as social media users find strong price action exciting, so they participate in more discussions than usual.
However, the scale of the spike the metric saw this time around may be worth noting. Historically, the asset’s price tends to swing against most people’s expectations, so a sudden surge of excitement could be a bearish sign for the cryptocurrency.
On the same chart, Santiment attached the Social Volume data for Avalanche (AVAX), which also witnessed a recovery. It seems that unlike Solana’s surge, few are paying attention to Avalanche’s recovery as the indicator’s value remained relatively low.
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Therefore, AVAX’s rally could be more likely to be sustainable than SOL’s, as it has seen much less FOMOat least according to the Social Volume.
SOL Price
Solana broke above the $151 level yesterday, but the asset has since seen a small pullback to $146. It is currently unclear whether this means that the negative FOMO effect is already affecting SOL.
Featured image from Shutterstock.com, Santiment.net, chart from TradingView.com