Dogecoin broke away from the rest of the market with a surge of 9%. Here’s why this could be bad for Bitcoin, historically.
Dogecoin Registered a 9% Jump During the Last 24 Hours
While most of the cryptocurrency market has seen sideways price action over the past day, Dogecoin has proven to be different as its value has seen a significant increase.
The chart below shows the trend in the value of DOGE over the past month.
From the graph, it can be seen that the price of Dogecoin sought the mark of $0.134 during this meeting and exceeded the peak of the previous month. Memecoin is now close to the July high, so if this run continues, memecoin may be able to use it again.
In terms of weekly returns, the latest jump means that DOGE is now up over 24%, making it the best performer among the top 50 coins by market cap.
Dogecoin isn’t the only memecoin that has been rallying; Commodity cousin Shiba Inu (SHIB) also enjoyed a boost in the previous day, although its 5% jump was less impressive than DOGE’s.
This recent focus on meme coins may not be the best sign for the cryptocurrency industry as a whole.
The Market Is Out For The Last Time Memecoins Got Attention
According to data from the analysis company Santiment, the Social Dominance of memecoins increased during the recent Bitcoin high above the level of $ 68,000. “Community Dominance” here refers to an index that tracks the percentage of discussions related to the top 100 coins on social media that a given coin or asset group currently owns.
Here is a chart showing the Social Dominance of the top 6 tier 1 assets compared to that of the top 6 meme coins recently:
As shown in the graph above, the Social Dominance of memecoins shot up earlier than Bitcoin and others were together, suggesting that investors have started paying attention to these speculative assets.
This interest in meme coins, however, ended up coinciding with the high market. “Typically, markets correct when the focus shifts from layer 1 back to speculative assets due to selfishness,” explained the analytics firm.
With Dogecoin and Shiba Inu pulling out of the pack over the past day, it seems that investor greed is still high, which could lead to more bearish action for Bitcoin and other top assets.
From the chart, it can be seen that the market tends to bottom out when attention is turned back to layer 1 networks, so it is possible that this may need to happen again if the industry as a whole is to continue.
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