Solana has now recovered back above $100 after the FUD due to the outage earlier, leading to a bottom formation for the cryptocurrency.
Solana Social Dominance Spiked Earlier As FUD Rose In Market
According to data from the on-chain analytics firm Santiment, Solana’s Social Dominance observed a sharp spike just earlier. The “Social Dominance” is an indicator based on another metric called the “Social Volume.”
The Social Volume keeps track of the total amount of discussion a topic or term (in this case, terms related to Solana) receives on the major social media platforms.
The metric measures this by counting the total number of posts/threads/messages on these platforms, making at least one mention of the given term.
The indicator doesn’t add up the number of mentions themselves because it can provide a skewed representation of the trend being followed in the market since, in this case, only a few threads with a large number of mentions would be enough to tick the metric.
While there is indeed talk around the topic in this example, it’s being restricted to just a few threads, suggesting it’s more of a niche-circle thing rather than an interest from the general trader.
Conversely, the total threads would only go up when there is discussion happening across social media. Social Dominance, the actual relevance metric here, takes the Social Volume for any coin and compares it against the top 100 cryptocurrencies.
Below is a chart showing the trend in Solana’s Social Dominance over the past year.
The value of the metric appears to have been quite high recently | Source: Santiment on X
As the graph shows, the Solana Social Dominance shot up to notable levels just recently, implying that the asset’s share of discussions among the top 100 coins had surged.
This trend was triggered by the network outage earlier in the week. The outage naturally caused a scare in the market, so traders took to social media to express their concern.
This outage lasted almost five hours and was the eleventh such phase of unplanned downtime over the past two years. As such, it’s not surprising to see FUD emerging among investors.
Historically, though, the cryptocurrency’s price has tended to do the opposite of what the crowd expects. An example of this is visible through the December top, which coincided with a massive spike in the Social Dominance.
Back then, the investors had gotten too excited, which has often been the perfect recipe for a top. During the latest FUD, the coin’s price went down briefly, but the asset rebounded quickly.
Since then, it has fed on this FUD and sharply climbed up, going against what most investors may have expected.
Solana has crossed the $104 mark after observing a rally of almost 9% during the past 24 hours, making it one of the best performers in the sector during this period.
Looks like the price of the coin has shot up over the past day | Source: SOLUSD on TradingView
Featured image from Shutterstock.com, charts from TradingView.com, Santiment.net
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