Santiment, a crypto analytics platform, has issued a warning following a moderate altcoin rally over the last few days.
According to Santiment, a recent increase in the number of positive terms on social media platforms may signal a bearish reversal.
Euphoria and fear of missing out (FOMO), according to Santiment, have reached a two-month high, which is usually an indication of a local top. According to Santiment, high levels of the opposite sentiment – fear, uncertainty, and doubt (FUD) – usually indicate the bottom has been reached.
“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 have been associated with euphoria and FOMO. Proceed with caution in this area.”
Some of the altcoins that have risen in value since Sunday include Solana (SOL), which is up 43% from $9.83 to $14.07 at the time of writing, and the decentralised autonomous organisation (DAO) of liquid staking protocol Lido DAO (LDO), which is up 49% from $0.951 to $1.42.
Santiment reports that, while the second-largest crypto asset by market cap has only moved slightly higher, whale interest has reached 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 regaining popularity.”
Ethereum, which hit a low of $1,168 on December 16th, is currently trading at $1,250 at the time of writing.
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