Data shows that Dogecoin and other meme coins are gaining a lot of attention on social media, which may not be an ideal sign for Bitcoin.
Top 6 Memecoins See Recent Surge in Social Dominance
In a new article for X, analytics firm Santiment discusses socially-led trends across several different sub-segments of the cryptocurrency space.
“Social dominance” here refers to a metric that basically tells us how much of a particular asset or group of currencies currently has presence on major social media platforms.
More formally, the value of this metric is calculated based on the percentage of discussions related to a given asset among the top 100 cryptocurrencies by market cap.
To determine this, the indicator collects posts/topics/messages on five platforms: X, Reddit, Telegram, 4Chan, and BitcoinTalk. They are then filtered based on relevant keywords.
Note that to measure “discussion”, this metric only counts posts that mention the asset at least once, rather than counting the mentions themselves. The advantage of this approach is that outlier posts containing hundreds of mentions will not skew the data.
Now, here is a chart shared by the analytics firm showing the changes in social dominance over the past few months in relation to the three segments of the market:
The three segments discussed are the Layer 1 top six, Layer 2 top six, and memecoin top six. "Layer 1" networks refer to the major blockchains that handle their own security, like Bitcoin and Ethereum. Networks built on top of these chains, like Polygon, are called "Layer 2." Of course, memecoins refer to popular meme-based tokens like Dogecoin and Shiba Inu.
As is evident from the chart, the top 6 Tier 1 social dominance surged a few days ago as Bitcoin hit multiple all-time highs (ATHs).
Since then, BTC has continued to explore new highs, but the attention of social media users seems to have shifted elsewhere, and the social dominance of the Layer 1 giants is gradually cooling.
Metrics for layer 2 tokens have remained relatively low during this period, meaning traders haven’t paid much attention to them lately. The assets that have been getting all the attention are memecoins, which just hit a new high in terms of discussion volume.
The reason for all the interest in these tokens is that Dogecoin has seen an impressive rally over the past week, eclipsing other tokens in the space after accumulating profits of over 104%. However, if past experience is any guide, this outperformance may not be a good thing.
“High levels of social dominance for speculative assets have historically often been a sign of greed and emotional trading,” Santiment noted. Assets in the crypto space tend to go against popular belief, so greed often leads to market tops.
Therefore, if Bitcoin and other currencies continue their bull run, attention may shift away from Dogecoin.
Dogecoin Price
At the time of writing, Dogecoin is trading at around $0.398, having gained more than 2% in the past 24 hours.
