According to the latest data provided by
Santiment, “memecoins” such as SHIB, DOGE and ELON are moving in an inverse correlation with the so-called “Social Dominance” indicator. As the indicator hits new lows, the price of the aforementioned coins skyrocketed.
Overall, meme-based and community-driven cryptocurrencies have been trending in recent months, with the Shiba Inu showing a 490% price increase, the Doge a 28% increase last month, and Elon a ridiculous 889% price increase. These are just what happened in the last month. One way or another, the community is the main fuel for these cryptocurrencies rather than institutional investors or use cases. While trading pairs for such cryptocurrencies remain highly volatile, there is no convenient way to analyze them using financial or technical analysis.
In the chart provided by the service, users can see the price of each specified coin and the Social Dominance indicator. When communities “forget” cryptocurrencies and the indicator starts to move downwards, their prices drop rapidly and only return when whales buy them back.
While the indicator actually has an inverse correlation with the price of these assets, it shows the common accumulation and distribution cycles it takes when retail traders are less concerned with them.
But when the community gets excited and starts buying, the big addresses are profiting and putting selling pressure on the asset, leading to a quick pullback. As the cryptocurrency loses its monetary value, the retail trader is starting to lose interest as well.