Solana recovered back above $100 after the FUD from the previous outage, which led to the formation of a bottom for the cryptocurrency.
Solana’s social dominance surged early as FUD hit the market
According to data from on-chain analytics firm st tly, Solana’s social dominance observed a sharp rise shortly before. “Social Dominance” is a metric based on another metric called “Social Volume”.
Social volume tracks the total amount of discussion about a topic or term (in this case, terms related to Solana) across major social media platforms.
The metric measures this by counting the total number of posts/threads/messages on that platform that mention that term at least once.
This indicator does not add up the number of mentions per se, as this may provide a distorted representation of the trends being followed in the market. In this case, just a few threads with a high number of mentions may be enough to see the metrics. .
In this example, there is indeed discussion of the topic, but it is limited to a few threads, suggesting it is more of a niche topic rather than of interest to the average trader.
Conversely, entire threads only go up as discussions occur on social media. Social Dominance, a real-world relevance metric, compares the Social Volume of any coin to the top 100 cryptocurrencies.
The chart below shows Solana’s social dominance trends over the past year.
The value of the metric appears to have been quite high recently | Source: Santiment on X
As you can see from the graph, Solana’s social dominance has recently risen to notable levels. This means that the asset’s share of the top 100 coins has surged.
This trend was sparked by the network outage that occurred earlier this week. The power outage naturally unsettled markets, prompting traders to take to social media to express their concerns.
The outage lasted nearly five hours and was the 11th stage of unplanned downtime in the past two years. Therefore, it is not surprising to see FUD emerging among investors.
However, historically, the price of cryptocurrencies has tended to run counter to what the public expects. An example of this can be seen in the December peak, which coincided with a sharp rise in social dominance.
In those days, investors were so excited that there was often a perfect way to get the highest price. Although the price of the coin briefly fell during the recent FUD, the asset quickly bounced back.
Since then, it has been fed FUD and has risen sharply, contrary to what most investors expected.
SOL price
Solana rose above $104 after rallying nearly 9% over 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, chart from TradingView.com, Santiment.net