Crypto analytics platform Santiment is sending out a warning on the heels of a moderate altcoin rally recorded over the past couple of days.
Santiment says that a recent increase in the number of positive terms on social media platforms could herald a bearish reversal.
According to Santiment, euphoria and fear of missing out (FOMO) have reached a two-month high and this is usually an indication that a local top is in. High levels of the opposite sentiment – fear, uncertainty and doubt (FUD) – usually signal the reaching of a bottom, per Santiment.
“This week’s modest crypto rally, particularly for altcoins, has led to a spike in social media mentions of terms like ‘buy’, ‘buying’, ‘bottom’, and ‘bullish’.
Historically, these positive terms are signs of euphoria & FOMO. Tread carefully at this spot.”
Some of the altcoins that have soared since Sunday include Solana (SOL), which, at time of writing is up 43% from $9.83 to $14.07 and the decentralized autonomous organization (DAO) of liquid staking protocol Lido DAO (LDO) is up 49% from $0.951 to $1.42.
On Ethereum (ETH), Santiment says that while the second-largest crypto asset by market cap has only moved up slightly, whale interest has risen to a three-week high.
“As altcoins have heated up, Ethereum quietly rebounded back above $1,260 for the first time in 3 weeks. Though not quite at the level of the big whale dip buys on December 16th (ETH’s local price bottom), whales are showing increased interest again.”
Ethereum, which reached a local low of $1,168 on December 16th, is trading at $1,250 at time of writing.
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