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Over the past week, blue-chip assets like Bitcoin (BTC) and Ethereum (ETH), have been major topics of discussion in the cryptocurrency space
Bitcoin (BTC) and Ethereum (ETH) had a strong week, naturally attracting a lot of attention in the crypto space. But meme coins like Dogecoin (DOGE) and Shiba Inu (SHIB) also had their moments in the past seven days.
According to the latest on-chain data, these asset classes topped the social charts, with the majority of the crypto crowd talking about them, especially after the price rallies. Here’s how the rising social sentiment can impact the prices of DOGE and SHIB.
FOMO May Be Key In Meme Coin Rally – DOGE, SHIB Surging
In a recent post on the X platform, Santiment shared that large-cap meme tokens are garnering a significant amount of attention on social media. According to the blockchain analytics firm, top meme coins are seeing their most crowd discussion since May.
This on-chain observation is based on the Santiment Social Dominance metric, which reflects the share of the discussions in crypto media referring to a particular asset or phrase. Santiment said in the post on X, “Top meme coins (DOGE, SHIB, etc.) [are] seeing [their] most crowd discussion since May (crowd FOMO may soon cause top).”
This positive shift in investor sentiment might signal renewed faith in the meme coin market. However, the increasing crowd hype is often a warning sign of a potential price top, as rising FOMO (fear of missing out) can dampen the momentum of developing price rallies.
FOMO, or fear of missing out, is a phenomenon where investors hastily purchase assets in high demand out of fear of forfeiting potential gains. While FOMO has been known to drive a coin to a higher value in the short term, excessive FOMO often leads to unsustainable upward trends and subsequent corrections.
Moreover, crypto prices historically tend to move in the opposite direction of the crowd. Hence, if the crypto crowd is paying this much attention to top meme coins, investors might want to approach the market with caution.
Interestingly, Santiment pinpointed top Layer 2 tokens, including Arbitrum and Optimism, as potentially lucrative investment alternatives due to their extremely low social dominance. “Speculative coins can certainly still pump a bit longer, but historical data shows that it pays to go where the crowd isn’t looking,” the on-chain firm added.
Dogecoin price chart for 07/21/23 on FTX | Source: DOGE/USD on TradingView
As of this writing, the price of Dogecoin (DOGE) has broken above the $0.14 level, reflecting an almost 6% increase in the past day. The world’s largest meme coin has been surging since the beginning of the week, rallying from a low of around $0.124 on Monday.
After forming a local top at $0.132 on Wednesday, DOGE price corrected slightly before resuming its uptrend later in the day. The meme coin reached a high of $0.142 before facing another wave of selling pressure, which pushed the price down to its current level.
DOGE price is now trading above several key technical indicators, including the 50-day moving average ($0.133) and the 100-day moving average ($0.127). The meme coin is also encountering resistance at the 200-day moving average ($0.148), which could limit further gains in the short term.
On the other hand, if DOGE price manages to break through the 200-day moving average, it could pave the way for a stronger rally towards the recent swing high at $0.16.
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