Bitcoin ‘social dominance’ rises as altcoins struggle
Data shows that Bitcoin’s social dominance has increased to high values recently as interest in altcoins among investors has decreased recently.
Bitcoin social dominance is now at its highest level since September 2022
According to data from the analysis firm on the chain Sentiment, attention has returned to BTC recently. “Social Dominance” is an indicator that tells us what proportion of discussions taking place on social media currently involve a specific cryptocurrency (which in this case is Bitcoin).
A relevant metric here is the “social volume”, which measures the total amount of social media text documents that mention the given resource at least once. The text documents here include a variety of social media-related pieces, such as tweets, forum posts, Reddit threads, Telegram chats, etc.
A key feature of the calculation is that it counts a text document only once regardless of how many times it may contain the keyword (and obviously there must be at least one mention for it to be counted at all). For example, if a long forum post contains “BTC” 10 times, the post still only contributes 1 unit to the asset’s social volume.
The social dominance works by comparing this social volume of BTC (or other assets) to the combined social volume of the top 100 coins according to market cap.
Naturally, when this indicator has a high value, it means that Bitcoin accounts for a high percentage of the total crypto-related discussions that take place on the internet. Such a trend suggests that interest in the original cryptocurrency is currently high.
Now, here’s a chart showing the trend of BTC’s social dominance over the past few months:
The value of the metric seems to have been quite elevated in recent days | Source: Santiment on Twitter
As shown in the graph above, Bitcoin’s social dominance has increased sharply recently as the prices of most altcoins have observed declines. BTC itself has taken a beating in March so far, but losses have still been smaller than many of the other assets in the sector.
The current value of the indicator is the highest it has been since September last year. This high social dominance of the cryptocurrency suggests that BTC has taken up a large portion of investor attention recently.
The better strength of Bitcoin compared to altcoins also means that investors may have abandoned alts over the past couple of weeks and bought into BTC instead.
“Higher Bitcoin social dominance has historically initiated market rebounds,” notes Santiment. If this past pattern follows now as well, the current strength of BTC could build towards a sustainable mining push in the coming days.
BTC price
At the time of writing, Bitcoin is trading around $22,000, down 7% in the last week.
Looks like BTC has continued to be flat recently | Source: BTCUSD on TradingView
Featured image from André François McKenzie at Unsplash.com, Charts from TradingView.com, Santiment.net
