Dogecoin separated itself from the rest of the market with a 9% increase. Here’s why this could be bad for Bitcoin, according to history.
Dogecoin recorded a 9% jump in the last 24 hours
While most of the cryptocurrency market saw sideways price movements during the previous day, Dogecoin proved to be different as its value witnessed a notable increase.
The chart below shows the DOGE price trend over the past month.
From the chart, it is visible that the price of Dogecoin reached the $0.134 mark with this rally and surpassed last month’s high. Memecoin is now near the July top, so if this run continues, memecoin could try as well.
In terms of weekly returns, the latest jump meant DOGE rose over 24%, making it the best performer among the top 50 coins by market cap.
Dogecoin is not the only memecoin that has been recovering; The asset’s cousin, Shiba Inu (SHIB), also enjoyed bullish momentum during the past day, although its 5% jump is less impressive than DOGE’s.
This latest focus on meme coins may not be the best sign for the cryptocurrency sector as a whole.
Market Topped Last Time Memecoins Got Attention
According to data from the analysis company Sanctionmemecoins’ social dominance soared during Bitcoin’s recent spike above the $68,000 level. The “Social Domain” here refers to an indicator that tracks the percentage of discussions related to the top 100 coins on social media that a particular coin or group of assets is currently occupying.
Here is a chart that shows how the social dominance of the top 6 tier 1 assets compared to the top 6 meme coins recently:
As shown in the chart above, memecoins’ social dominance soared earlier as Bitcoin and others rallied, suggesting that investors have started to pay attention to these speculative assets.
This interest in meme coins, however, ended up coinciding with the market top. “Typically, markets correct when focus shifts from layer 1 to more speculative assets due to greed,” explains the analytics firm.
With Dogecoin and Shiba Inu moving away from the pack over the past day, it appears that investor greed is still high, which could potentially lead to more bearish action for Bitcoin and other key assets.
From the chart, it is visible that the market tended to hit lows when attention turned to tier 1 networks, so it is possible that this will have to happen again if the sector-wide run is to continue.