As a seasoned researcher with years of experience in the cryptocurrency market, I must admit that the current trend of meme coins like Dogecoin is a fascinating yet concerning development. The meteoric rise in their social dominance, as indicated by Santiment’s data, suggests a shift in investor sentiment that could potentially impact Bitcoin and other major players.
The data suggests that Dogecoin and similar meme coins are attracting substantial interest on social platforms, which could potentially indicate unfavorable news for Bitcoin.
Top 6 Memecoins Have Seen Their Social Dominance Rocket Up Recently
On their latest update on platform X, data analysis company Santiment shares insights into the shifting social influence among various categories within the crypto market.
In this context, “Social Dominance” signifies a measure indicating the prominence or influence a specific asset or collection of cryptocurrencies currently holds across prominent social media platforms.
The value of this metric is determined by calculating the proportion of conversations about the leading 100 cryptocurrencies in terms of market capitalization that involve the specified asset.
To determine this, the indicator collects posts/threads/messages available on five platforms: X, Reddit, Telegram, 4Chan, and BitcoinTalk. It then filters them for the keyword in question.
In other words, when assessing “discussions,” we tally posts with any reference to the asset, not just individual mentions. This approach has the benefit of avoiding distortion in the data by disregarding posts that excessively repeat the asset’s name multiple times.
Here’s the updated chart provided by the analytics company, illustrating shifts in Social Dominance across different market segments over the past several months.
The three categories under discussion are the leading six from Layer 1, the leading six from Layer 2, and the top six meme coins. Layer 1 networks represent the main blockchains that manage their own security, such as Bitcoin and Ethereum. Layer 2 networks, like Polygon, are those built on these primary chains. Lastly, meme coins are the well-known tokens inspired by internet memes, for example, Dogecoin and Shiba Inu.
It’s clear from the graph that the social dominance of the top 6 in layer 1 has significantly increased over the past few days, due to Bitcoin reaching several unprecedented peak prices.
Since then, Bitcoin (BTC) has consistently reached new peak levels, yet there seems to be a shift in attention among social media users, as the dominance in social discourse of the large-scale layer 1 cryptocurrencies has shown signs of decline.
Over these periods, the activity level for layer 2 coins has remained comparatively subdued, suggesting that traders’ interest in them has waned somewhat. On the other hand, memecoins have been grabbing most of the spotlight lately as their discourse has reached an unprecedented peak.
As a crypto investor, I’ve noticed an increasing buzz surrounding these tokens, and I believe it’s primarily due to Dogecoin’s remarkable surge over the past week. This rally has left other sectors trailing behind, with Dogecoin accumulating profits exceeding 104%. However, if history serves as a guide, this exceptional outperformance might not necessarily be a positive sign.
According to Santiment, a long-standing pattern in the financial world is for assets that are highly speculative to be predominantly influenced by people’s greed and impulsive trading. However, in the cryptocurrency market, assets often move in the opposite direction of popular opinion, suggesting that excessive greed has historically signaled market tops.
It appears that maintaining my attention primarily on Dogecoin might need to be reconsidered, given the potential continuation of the bullish trends in Bitcoin and other cryptocurrencies.
Dogecoin Price
At the time of writing, Dogecoin is trading around $0.398, up over 2% in the last 24 hours.
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2024-11-15 12:05