Bitcoin [BTC]: What its social dominance stats tell us about the ‘royal coin’ label

• Bitcoin’s social dominance has reached its highest point since September 2022

• Longs failed to avoid liquidations as losses continue to pour in

Bitcoins [BTC] The drop in prices since the start of the new month may have been demoralizing for investors. However, the royal coin continues to exercise supreme dominance in the market. This claim is because the number one cryptocurrency by market capitalization has surpassed top altcoins during the aforementioned time period.

Read Bitcoins [BTC] Price prediction 2023-2024

A quick assessment of the market puts BTC down 6.21% at the time of writing. However, fellow competitors like Litecoin [LTC] fell with 12.54% while Cardano [ADA] fell by 10.37%.

Needless to say, there is only a small chance that BTC can imitate the performance of January and February. However, the crypto’s first resistance to its historic March decline may now be on the move.

Is a historic setback on the way?

Santiment confirmed in his March 7 tweet that BTC has outperformed a majority of the market’s altcoins. However, despite the admission, the analytics platform on the chain also pointed to the trend of social dominance.

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🧐 #BitcoinThe price is -6% in March, but still outperforms most #altcoins. With #crypto giving up much of their Jan/Feb gains, attention has returned to $BTC. Higher Bitcoin social dominance has historically initiated the market’s rebound. pic.twitter.com/J0re8Kok87

— Santiment (@santimentfeed) March 7, 2023

Social dominance measures the proportion of discussions that refer to an asset. According to Santiment, the calculation rose to the highest level since September 2022. Historically, such events prepare the way for a setback in the market.

The aforementioned observation suggests that BTC is getting hyped. However, the basis for capitalizing on near-term bottoms may again be absent as dominance, previously at 19.19%, fell to 13.86% at press time.

Despite the initial increase, short traders did not give up on maintaining their position and gained significantly over longs. This was because of the Future’s perpetuity financing rateaccording to Glassnode.

A positive interest rate means that long positions paid shorts, while a negative interest rate indicates otherwise. At press time, the perpetual funding rate was 0.05%, meaning most longs were liquidated across exchanges.

Source: Glassnode

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Are you going down the drain?

Due to the recent price drop, the greens recorded in the first two months appear insufficient to exclude holders from incurring losses. Based on Santiment’s data, the network’s realized gains and losses remained negative at -6.07 million.

A typical interpretation of the framework indicates capital injection to absorb the sales side while profits on the chain are realized. On the flip side, negative values ​​remain the rate when price trends fall and capital outflows occur.

Source: Sentiment

Nevertheless, the metric condition can also signal an upside reversal, as suggested by the increase in social dominance.

Still, BTC is on the verge of losing its grip on $22,000. In addition, developments such as Silvergate dumping and general sentiment can also drive the coin below its current value.