Ether’s recent price rally could be due for a pullback, as a spike in social media chatter — hitting levels of “extreme euphoria” — may signal a near-term correction, according to sentiment analysis platform Santiment.
Still, other market indicators suggest the rally might not be over yet, with Ether climbing more than 50% in the past 30 days.
“Extreme Euphoria” Could Pose a Risk to Ether’s Price
“Social metrics are flashing warning signs. Since early May, Ethereum’s price ratio against Bitcoin has soared by an impressive 70%,” Santiment said in a report released Friday.
“This surge has triggered extreme euphoria and a sharp rise in social dominance — often a red flag,” the report added.
According to the sentiment analysis platform, when a cryptocurrency’s social dominance climbs to unusually high levels, it may indicate the asset is becoming overvalued. “It suggests the asset is over-hyped and the trade is becoming crowded, which raises the likelihood of a price correction,” Santiment explained.
At the time of publication, Ether is trading at $3,750 — up 51.84% over the past 30 days, according to Nansen. Still, Santiment noted that the rally might not be over yet, as other indicators show the market hasn’t hit “peak frothiness.”
“Social dominance for memecoins remains relatively low,” Santiment noted, highlighting that previous market tops have typically been marked by the opposite trend.
“A true market-wide peak is usually driven by broad, irrational speculation,” the firm added. “The lack of that behavior right now could indicate that this rally still has room to run.”
Ether Treasury Adoption Could Propel Price to New Highs
Meanwhile, signs of rising corporate treasury interest in Ether are emerging, highlighted by significant purchases from companies like SharpLink Gaming and Bitmine Immersion Technologies. Santiment analyst Maksim Balashevich suggested this developing narrative of a “Michael Saylor for Ether” could serve as a key catalyst driving the asset to new all-time highs.
Galaxy Digital CEO Michael Novogratz said Thursday that Ether could outperform Bitcoin over the next three to six months, citing limited ETH supply as a key factor. “There’s not a lot of supply of ETH, and so I think ETH probably has a chance to outperform Bitcoin in the next three to six months,” he stated.
Meanwhile, Santiment issued a cautionary note for Bitcoin on Sunday, pointing to signs of overheating in social sentiment.
The firm noted that nearly half of all crypto-related social media mentions last week were focused on Bitcoin as it reached new all-time highs — a level of dominance that could indicate a local top and the potential for a short-term correction.
“As Bitcoin’s market value climbed past $123.1K for the first time in its 17+ year history, we also saw a historic spike in social dominance,” said Santiment analyst Brian Quinlivan.
