High activity on social networks and stock market indicators signal the overheating of the ether (ETH) price. At least this is the conclusion reached by Santiment analysts.
According to published research results, social activity around ETH is at all-time highs. This suggests that a lot of people were interested in cryptocurrency in a short period of time.
ETH social engagement. Source: santiment.net
Moreover, on Monday, May 3, the daily increase in social activity set a new record, overtaking the results of the 2017 rally. Recall that at the same time ether broke the $ 3000 bar for the first time, rising to $ 3430.
Source: nomics.com
As the price rises, so does market optimism, and the excitement on social media has returned to a three-month high.
Source: santiment.net
Nevertheless, over the past couple of days, the averaged indicators for social mood around ether began to decline. This, Santiment says, suggests that interest in cryptocurrency may be waning.
“It is not surprising that the price of ethereum has become more volatile over the past 36 hours, as social indicators indicate an increased risk of a short-term correction,” Santiment said.
A potential bearish scenario can also be indicated by an inflow of over 1 million ETH to the exchanges, which was recorded on Tuesday, May 4.
Source: santiment.net
According to Santiment, the surge in exchange inflows of ETH may indicate “increased pressure” from sellers. In addition, increased pressure may occur at the $ 3,500 mark, which will become an obstacle to sustained growth.
Analysts believe that the ether rate must get rid of overheating before the market goes to new highs. Otherwise, cryptocurrency cannot avoid large-scale sales. However, Santiment admits that the situation could be very different. According to them, the current Bitcoin rally has proven that at times fundamental indicators take time to catch up with the price of the coin.
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