Dogecoin has broken away from the rest of the market with a 9% gain. Here's why this could be detrimental to Bitcoin, historically.
Dogecoin has recorded a 9% increase in the last 24 hours
While most of the cryptocurrency market has seen sideways prices over the past day, Dogecoin has proven to be different as its value has seen a significant increase.
From the chart, we can see that Dogecoin price has reached $0.134 with this surge and has surpassed last month's high. Memecoin is currently nearing its July peak, so if this surge continues, memecoin is likely to increase in price as well.
In terms of weekly gains, the latest gains mean DOGE is now up over 24%, making it the best performing coin among the top 50 coins by market capitalization.
Dogecoin isnât the only memecoin to see a surge in price; its sister coin Shiba Inu (SHIB) has also seen a surge in price over the past day, although its 5% gain isnât as impressive as DOGEâs.
The latest attention on meme money may not be the best sign for the entire cryptocurrency sector.
Market Peaks Last Time Memecoin Was in the Spotlight
According to data from analytics firm Santiment, memecoinâs Social Dominance spiked during Bitcoinâs recent rally above $68,000. âSocial Dominanceâ here refers to a metric that tracks the percentage of discussions related to the top 100 coins on social media that a given coin or asset group is occupying right now.
Here is a chart showing how the social dominance of the top 6 layer 1 assets has compared to the top 6 meme coins recently:
As shown in the chart above, memecoin's social dominance has spiked in the past as Bitcoin and other coins have rallied, suggesting that investors have started to pay attention to these speculative assets.
However, the interest in these meme coins eventually coincided with a market peak. âTypically, the market corrects when the focus shifts from layer 1 to more speculative assets due to greed,â the analytics firm explained.
With Dogecoin and Shiba Inu separating from the pack over the past day, it appears that investor greed remains high, which could potentially lead to more bearish moves for Bitcoin and other top assets.
From the chart, it can be seen that the market tends to bottom out when attention shifts back to the lp1 network, so it is likely that this will happen again if the overall industry momentum continues.
