Bitcoin Social Volume Spike Could Signal Incoming Euphoria

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In Brief
  • As the price of Bitcoin tries to find a support level, a vital crowd metric indicates a sudden spark in retail interest.

  • Technical indicators also strengthen Bitcoin's bullish narrative amid growing engagement.

  • Bitcoin continues to battle for market dominance.

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While market prices have plummeted in the last few days, Bitcoin social volumes have begun to surge. Retail buyers may be seeking to take advantage of this opportunity to buy the dip — and they’re not being quiet about it.

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Research from Onchain data aggregator, Santiment, has revealed that euphoria may be returning to the market after seeing some notable spikes in its ‘social volume’ indicator for Bitcoin.

Santiment’s Bitcoin social volume is a crowd metric that measures the level of interest among investors by gauging the number of mentions on social media platforms.

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Over the last six days, sentiment has shown an inverse correlation with the price of Bitcoin. This development is most likely the result of market participants spotting an opportunity to take positions or make buys at lower prices.

BTC Price vs. Social Volume chart by Satiment

On Jan. 22, when the price of Bitcoin tanked below the $29,000 price level, social media volume exploded to 908,000 mentions. A similar engagement level was last seen between Jan. 14 and 15, when it recorded its new all-time high.

Positive vs. Negative Bitcoin Mentions chart by Santiment

Although social media mentions consist of both positive and negative sentiments, the tool takes a deeper dive into these two separate categories. A peek at the chart supports the narrative of a bullish trend as it shows a higher dominance of what it considers to be positive mentions.

The resurgence of Bitcoin social volumes after a significant sell-off reinforces the digital asset’s bullish case. Meanwhile, traders who managed to buy the bottom are up a tidy 10% at the time of press.

One possible factor contributing to the current price of Bitcoin is the competition for dominance with the rest of the market. Within the first three weeks of 2021, Bitcoin dominance has dropped by 10%.

This shift of market share was reflected by the gains that sent the other half of the market into a momentary frenzy led by Ethereum.

At the time of press, Bitcoin currently sits at $31,500 — down 11% since yesterday’s open.

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