Dogecoin broke away from the rest of the market with a 9% rally. This is why this could be bad for Bitcoin, depending on history.
Dogecoin registered a 9% rise in the last 24 hours
While most of the cryptocurrency market has seen sideways price movement over the past day, Dogecoin has shown to be different as its value has seen a notable increase.
The chart below shows the trend in DOGE price over the past month.
From the chart, it appears that Dogecoin price has reached the $0.134 mark with this rally and surpassed the high from last month. Memecoin is now approaching the July high, so if this rally continues, it is likely that memecoin can reach it as well.
In terms of weekly returns, the latest jump means DOGE is now up more than 24%, making it the best performer among the top 50 coins by market cap.
Dogecoin isn’t the only memecoin on the rise; The parent’s cousin Shiba Inu (SHIB) is also enjoying bullish momentum over the past day, although its 5% jump is less impressive than DOGE.
This recent focus on meme coins may not be the best sign for the cryptocurrency sector as a whole.
Topped the market the last time Memecoins got attention
According to data from the analytics company saintDuring Bitcoin’s recent peak above the $68,000 level, the social dominance of meme coins rose. “Social dominance” here refers to an indicator that tracks the percentage of discussions regarding the top 100 coins on social media that a particular coin or asset group currently holds.
Here is a chart showing how the social dominance of the top 6 tier 1 assets compares to the top 6 meme coins recently:
As shown in the chart above, the social dominance of memcoins rose earlier with the rise of Bitcoin and others, indicating that investors are starting to pay attention to these speculative assets.
However, this interest in meme coins ended around the market peak. “Typically, markets correct when focus shifts away from the top layer toward more speculative assets due to greed,” the analytics firm explains.
With Dogecoin and Shiba Inu withdrawing from the group over the past day, it appears that investor greed remains high, which could lead to further downward movement for Bitcoin and other important assets.
From the chart, it seems clear that the market tends to hit bottoms when attention shifts back to layer 1 networks, so it is possible that this could happen again if the sector-wide trend continues.
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