Data shows social media attention has recently been shifting from Bitcoin and other major assets to meme-based tokens like Dogecoin.
Dogecoin & Other Top Memecoins Have Seen A Spike In Social Dominance
In a new Insight post, the on-chain analytics firm Santiment has talked about how the Social Dominance has changed for the different sides of the sector recently. The “Social Dominance” here refers to an indicator that’s based on another metric known as the Social Volume.
The Social Volume measures the total amount of discussion that a given topic or term is receiving on the major social media platforms. It does so in terms of the number of posts that contain at least one mention of the topic.
Now, the Social Dominance, the actual metric of relevance in the current discussion, tells us what percentage of the Social Volume related to the top 100 cryptocurrencies by market cap that any given asset or group of assets occupies.
Here is the chart for the indicator shared by the analytics firm that shows the trend in its value for three major sides of the sector over the past month:
Looks like two of the groups have seen the metric go down in recent days | Source: Santiment
As displayed in the above graph, the Layer 1 and Layer 2 Top 6 have both observed a sharp decline in their Social Dominance, implying investors have started talking about them lesser.
‘Layer 1’ networks are those that are the primary blockchains not built on top of any other, like Bitcoin and Ethereum. The networks that are dependent on another, like Polygon, are called ‘Layer 2.’
While social media interest related to the six largest cryptocurrencies of these types has dwindled recently, it has gone up for the third group: the Memecoin Top 6.
This shift in focus toward Dogecoin and company has come as the recovery rally has stalled for Bitcoin and other coins. This trend could indicate that the investors may now be looking to gamble on the more speculative assets in the sector.
In other words, the fact that the Social Dominance of the Memecoin Top 6 has jumped while Layer 1 and Layer 2 assets have lost mindshare could be a sign of greed in the market.
Historically, the cryptocurrency market has tended to move in the direction that goes contrary to the expectations of the majority. This means that when there is fear among the investors, a bottom can be probable, while the presence of greed can lead to a top.
In this view, Dogecoin and other memecoins gaining attention at the moment could prove to be bad news for the digital asset sector as a whole.
DOGE Price
At the time of writing, Dogecoin is floating around $0.178, up more than 3% in the last seven days.
The trend in the Dogecoin price during the past five days | Source: DOGEUSDT on TradingView
Featured image from Dall-E, Santiment.net, chart from TradingView.com
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