Data shows that Twitter tracks the number of Ethereum has a strong correlation with the price of ETH

With Ethereum 2.0 in the works, the debacle over the destination of this cryptocurrency has intensified. Some of the main analysts in the sector say that it could serve as a catalyst for a new bullfight. Meanwhile, others argue that a major fix is ​​underway.

A renowned Chartist under the pseudonym TraderXO, for example, recently anticipated that Ethereum was destined for a rally before continuing its march towards 142. $ Now that the giant of the smart contracts increased by more than 17% compared at the bottom of Monday, it could prepare for a massive bearish momentum.

Given the unpredictability of the cryptography market, each scenario must be taken with a grain of salt. However, the basic parameters suggest that such a pessimistic perspective can really be realized.

Ethereum Twitter tracking counts as a prize

Changes in the number of followers in the official Ethereum Twitter account It seems to be strongly correlated to the price action of this altcoin. In fact, every time the number of Ether followers on Twitter decreases, its price tends to follow.

This strange correlation has been in development for over a year, adding credibility to its predictive powers on the price of ETH. And, the Santiment Twitter Change Index helps visualize this trend.

After the Ether peak at $ 363 at the end of June 2019, for example, the 7-day average of the number of followers on Twitter Ethereum has entered a bearish dynamic. By the time this indicator dropped more than 40%, the selling pressure behind ETH accelerated, bringing it down to $ 191.

A similar phenomenon occurred in mid-February of this year. As Ethereum hit an annual high of $ 287, the 7-day average change in Twitter started to drop from 933 to 390. A day later, ETH fell by 27%. Then, the metric of Santiment fell, followed by the famous March market crisis.

Now, this fundamental indicator seems to have reached April 30 from a high of 1,132 to a low of 183. The major bearish movement took place when Ethereum peaked at $ 227.

Since then, the giant of smart contracts has fallen by more than 12%. However, the extent to which the average change in Twitter over 7 days has decreased suggests that ETH could be destined for a more marked decline.

Strong support to come

An increase in sell orders could cause the price of Ethereum to drop, as indicated by the aforementioned index. IntoTheBlock's In / Out of the Money Around Price (IOMAP) model reveals that, on its decline, Ether could find solid support at around $ 180.

Here, nearly 1.5 million addresses have bought 6.35 million ETH. Such a large supply barrier could have the ability to hold the smart contract giant from falling further. But if you don't, IOMAP shows that the next support area is around $ 158.

Only time will tell if the 7-day Santiment change rate on Twitter turns out to be correct again. If you do, chances are that marginalized investors will take this opportunity to re-enter the market. A new inflow could have the ability to trigger the bull cycle everyone has been talking about.

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