Americans carried the digital currency higher, but their enthusiasm may be waning.
It was a Shiba Inu shooting across the sky: Dogecoin’s run over the past week will be one for the history books. However, for all the fireworks social media data is indicating that the meme’s run may have met its end.
The digital currency, which originally launched in 2013 and has been at the center of a number of absurd headlines and scams over the years, notched another chapter in its often puzzling history over the past few days. On Friday, DOGE managed to eclipse Ethereum in total exchange volume (doubling, in fact), the capstone to a remarkable run that saw it double in price in a day, capping over 5000% gains on the year.
However, at its core DOGE is a meme, and memes are propagated by and fundamentally rely on social media. When the meme can’t spread, the price will crash.
At the time of publication, DOGE is down 35% on the day to $.26, retreating from $.40 highs — and social media sentiment data provided by The TIE and Cointelegraph Markets Pro indicates that there’s more pain on the horizon.
Volume verses sentiment
On Friday, Google Trends posted a Tweet highlighting the worldwide search habits of Bitcoin and DOGE traders. They found that while most of the world remained focused on BTC, American traders only had eyes for Dogecoin.
— GoogleTrends (@GoogleTrends) April 16, 2021
This heatmap concurs with data provided by The TIE. Total Tweet volume referencing DOGE ebbs as the US sleeps and perks up during American daytime hours, often peaking at noon EST, with volume especially robust while DOGE is rallying:
However, simple search and Twitter volume doesn’t always point to a price rally. As Google Trends’ infographic pointed out, sentiment on a volume surge can be mixed: many of the top search terms centered on traders trying to augur how much gas the DOGE rally has left in the tank.
The uncertainty has spread to Twitter as well. While sentiment for the currency was strongest during its run to $.16 on April 14th, the “waves” of sentiment matching volume have been decreasing on the run up — while the total Twitter volume peaked with DOGE’s price at $.40, it has been slumping for days now:
Ultimately, while volume and sentiment are what pushed DOGE to its lofty heights, a rapid price retreat now appear to be pulling Dogecoin back to earth.