Social Media Hype Preceded the Recent Corrections in Dogecoin and Apecoin, Santiment Reports

The on-chain analytics firm Santiment has shed light on the underlying reasons for the recent corrections observed in Dogecoin and Apecoin.

On-chain analytics firm Santiment has highlighted the underlying reasons behind the recent corrections observed in Dogecoin and Apecoin. According to a recent post by Santiment, the fluctuations in these memecoins can be attributed to a sudden spike in the Positive Sentiment vs. Negative Sentiment Ratio.

This ratio, which measures the balance of positive and negative comments on social media, utilizes a machine-learning model developed by Santiment to differentiate between sentiments. When the metric value exceeds zero, it indicates that positive comments are outpacing negative ones. Conversely, if the value is below zero, it suggests a predominance of negative sentiment.

In recent times, both Dogecoin and Apecoin have experienced sharp increases in this sentiment ratio, indicating a surge in positive social media commentary. Notably, these spikes occurred simultaneously with peaks in their market prices. The analysis further includes GIGA and GOAT, two other memecoins that exhibited similar sentiment and price patterns, although they peaked earlier than Dogecoin and Apecoin.

The surge in positive sentiment may initially seem like a positive sign, suggesting market confidence. However, Santiment points out that such spikes are often indicative of excessive hype, which, historically, signals an impending market correction. This phenomenon is not limited to memecoins but can be observed across various cryptocurrencies.

As Santiment explains, market prices tend to move in a way that counters the expectations of the general public. When sentiment becomes overwhelmingly bullish or bearish, it creates conditions that make market movements more predictable—either for buying or selling.

Considering the timing of the positive sentiment spikes, it is possible that the Fear Of Missing Out (FOMO) among investors might have contributed to the corrections in the prices of Dogecoin and similar assets. As these coins continue to be monitored, the Positive Sentiment vs. Negative Sentiment Ratio will be a key metric to watch. Any cooling of this metric might signal a renewed bullish momentum for these coins.

Having approached the $0.150 mark a few days back, Dogecoin has since seen a correction in its price, which has now retracted to $0.136. The memecoin has seen a strong bullish run over the past few weeks.