The analytics firm Santiment has revealed how social media traders have moved their attention to Bitcoin from Dogecoin and other memecoins recently.
Dogecoin & Other Top Memecoins Have Seen A Decline In Social Dominance
In a new post on X, Santiment has talked about how cryptocurrency market sentiment on social media has changed amid the latest bearish downturn. The indicator of relevance here is the Social Dominance, which keeps track of the percentage of social media discussions related to the top 100 coins by market cap that a particular asset or group of assets is contributing right now.
The indicator measures the degree of discussion or talk related to an asset by counting up the number of posts that are making unique mentions of it. The reason it doesn’t count up the mentions themselves is that they can provide a false picture of the trend being followed in the sector.
Focusing on just the posts means that a few outlier ones with hundreds of mentions can’t skew the data by themselves and the metric only registers a spike when discussion is spread across the major social media platforms.
In the context of the current topic, the Social Dominance of two asset classes is of interest: the Layer 1 Top 6 and the Memecoin Top 6. The former includes the six largest layer 1 networks (that is, blockchains that handle their own security and aren’t built on top of another network, like Bitcoin) and the latter the six largest meme-based tokens (like Dogecoin).
Below is the chart shared by the analytics firm that shows the trend in the Social Dominance for these two types of cryptocurrencies over the last few weeks:
As displayed in the graph, the Social Dominance of the Memecoin Top 6 was high a couple of weeks ago, implying social media users were highly interested in Dogecoin, Shiba Inu, and other such tokens.
Since then, however, the metric has followed an overall downward trajectory for this class of assets. It would appear that investor attention has shifted to Bitcoin and other layer 1 assets, as their combined social dominance has risen during the same period.
Historically, whenever Dogecoin and other memecoins have been at the center of attention in the market, it has been a sign that the investors are becoming greedy.
Cryptocurrency markets generally tend to move against the expectations of the majority, so it may not be a surprise that this greedy sentiment was followed by a downturn in the sector.
The shift in Social Dominance to safer investments like Bitcoin would imply the investors are now becoming fearful. It’s possible that the sector would continue to decline in the coming days, but at least with the sentiment seeing a flip, there is more of a chance that a bottom can be reached.
DOGE Price
At the time of writing, Dogecoin is floating around $0.31, down more than 24% over the last seven days.