Santiment Confirms FOMO And FUD Affect Price Change Indicators

Since the start of 2023, the markets have experienced increased openness, reported Santiment. The crypto analytics platform also notes the extent of fluctuation as the trading community discusses that prices have remained within the range of $20,000 and $25,000, for approximately five weeks.

Notably, surges in either price level frequently lead to indicators of a shift in price direction, according to Santiment.

Moreover, during price drops, it is expected to observe traders predicting the bottom formation and calling for prices to reach $20,000. Conversely, as prices approach $25,000 during an upward trend, it is common to observe more mentions of a potential market top forming.

Santiment shared that high levels of buy calls typically correspond to price declines, while high levels of sell calls correspond to price increases.

As per Santiment, traders often use terms such as FOMO (fear of missing out) and FUD (fear, uncertainty, doubt) to mock weak traders who succumb to prevailing trends. For instance, during the sharp price decline around February 13th, traders pointed out the prevalence of FUD among others.

However, these terms can also serve as true indicators. A surge in FOMO often coincides with price tops. Conversely, red bars indicating a rise in FUD tend to signal a higher probability of an upcoming price increase. In essence, traders unwittingly provide valuable insights for identifying market trends.

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