- SOL’s social dominance hit a yearly high, indicating a possible 3x repeat.
- The sentiment around the token crossed into the positive area amid a forthcoming sell-off.
As expected, FTX’s imminent liquidation has left Solana [SOL] in a sorry state. The token, which is the biggest holding of the now-collapsed exchange dropped to $17.98, resulting in a 6.98% decrease in the last seven days.
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SOL’s social dominance goes over the roof
Due to the attention around Solana, the project’s social dominance touched its highest point in 2023. Similar to market dominance, social dominance considers the share of voices conversing about a project or token. To get the value, LunarCrush divides the social volume of an asset by the entire cryptocurrency market’s social volume.
But that’s not all. According to the data shared by pseudonymous Osmosis researcher Emperor Osmo, the increase in social dominance brings back memories of the past. In his post on X (formerly Twitter), Emperor Osmo noted that the last SOL’s social dominance reached such heights, the token value almost tripled.
$SOL social dominance hits yearly highs despite price dip.
Last time this occurred, we skyrocketed from $9 to $25. pic.twitter.com/rYrpB2jmSW
— Emperor Osmo🧪 (@Flowslikeosmo) September 11, 2023
So, is it possible to experience a repeat? To address this, metrics like the weighted sentiment would be useful. By definition, the weighted sentiment measures the unique social volume of assets by looking at the positive/negative commentary on social platforms.
At the time of writing, Solana’s weighted sentiment had jumped into the positive region. Previously, the same metric tanked to -0.546. However, the recovery to 1.031 suggests that market players believe the price drop would only last for the short term.
Therefore, it is very likely that participants are taking advantage of the dip, and have the viewpoint that SOL is currently trading at a discount.
Weeping may last for the night but…
Meanwhile, it might also pique your interest that Solana’s on-chain volume also increased. According to Santiment, the volume was 399.21 million. For context, on-chain volume depicts the amount of tokens transferred from external wallets into exchanges.
Thus, this means that a likely selling pressure may occur apart from FTX’s liquidation. This was further proven by the open interest on exchanges. Used to determine market sentiment on exchanges, a hike in the metric suggests an increase in trading activity and possible sell-offs.
On the other hand, a decrease implies muted market activity. At press time, SOL’s open interest on exchanges spiked to 1.06 billion, confirming the aforementioned short-term sentiment.
Read Solana’s [SOL] Price Prediction 2023-2024
Still, a section sees the further decline as a chance to accumulate for the mid to long term.
There was also another section that believes the Fear, Uncertainty, and Doubt (FUD) around Solana might not push the token to the lows experienced during the November 2022 FTX contagion.