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24 October, 2024

Dogecoin & Apecoin: Did Hype Lead to Their Recent Drops?

24 October, 2024

The Hype That Drove Dogecoin & Apecoin Down

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On-chain analytics firm Santiment has uncovered a potential culprit behind the recent corrections experienced by Dogecoin and Apecoin: excessive hype.

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Santiment’s analysis, shared on X (formerly Twitter), reveals a spike in the \”Positive Sentiment vs. Negative Sentiment Ratio\” for Dogecoin and other memecoins. This metric, powered by Santiment’s machine learning model, gauges the overall sentiment on social media, with a positive value indicating more positive comments than negative ones.

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The chart below, provided by Santiment, illustrates the trend in this indicator for Dogecoin, Apecoin, GIGA, and GOAT over the past few months:

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\"Chart

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As the chart shows, Dogecoin and Apecoin both experienced significant surges in positive sentiment, suggesting a surge of positive comments about these coins on social media. Interestingly, these spikes coincided with peak prices for both DOGE and APE. While a positive sentiment can reflect market confidence, a large influx can be a sign of excessive hype, a phenomenon that has historically driven tops in memecoins and cryptocurrencies as a whole.

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\”Prices typically always go the opposite direction of the crowd’s expectations, and when the crowd gets extreme on either the bullish or bearish end, it becomes highly predictable to buy or sell,\” explains Santiment.

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The timing of these positive sentiment spikes suggests that the Fear Of Missing Out (FOMO) that swept through investors might have fueled the recent corrections faced by Dogecoin and other memecoins.

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The Positive Sentiment vs. Negative Sentiment Ratio now becomes a crucial indicator to watch. Any cooling of this metric could signal a resumption of bullish momentum for these coins.

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Dogecoin’s Recent Performance

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Dogecoin, which had reached near $0.150 a few days ago, has since experienced a correction, pulling back to the $0.136 level.

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Disclaimer: This content is for informational purposes only and should not be considered financial advice. Always conduct thorough research and consult with a qualified financial advisor before making any investment decisions.