DOGE and SHIB Face Market Challenges, Bitcoin Recovery Key
The Bottom Line
In the world of cryptocurrencies, two prominent meme coins, Dogecoin (DOGE) and Shiba Inu (SHIB), are at the center of an intense debate. Both have recorded losses in the recent past, but speculative movements and market data suggest that one of the two could be more affected in a potential sell-off scenario. This post analyzes the current market trends to find out which meme coin may carry the greater risk.
Market Dynamics of Dogecoin and Shiba Inu
Both Dogecoin and Shiba Inu have suffered losses of 11.4% and 8.5% respectively in the past week. Despite a short-term increase of over 10% in the last 36 hours, the losses were significantly higher before. This development coincides with a generally fearful market environment and a Bitcoin price trading below $60,000. The analysis of futures market data provides insight into the strength and potential bottom formation of both meme coins.
Speculative Interest and Market Sentiment
The analysis of open interest and funding rates shows significant differences between Dogecoin and Shiba Inu. While open interest for Shiba Inu has been steadily decreasing since early March, indicating a lack of conviction on the part of bulls, Dogecoin shows a different dynamic. Here, the largest drop in open interest came in the second half of April, coupled with a price increase of 86% compared to 39% for SHIB. These data suggest stronger speculative interest in Dogecoin.
Who is Closer to the Bottom?
SHIB’s longer retracement phase could suggest that this coin is closer to a potential bottom formation. Shiba Inu’s funding rates were negative on many consecutive days in April, indicating a stronger willingness to short SHIB compared to DOGE. This reinforces the bearish sentiment around Shiba Inu.
The Role of Bitcoin
Both meme coins are heavily dependent on the overall market dynamics and in particular the price development of Bitcoin. Despite recent losses, the 365-day MVRV ratios for Dogecoin and Shiba Inu show that long-term holders are still in a respectable profit zone. A bullish turnaround in Bitcoin could be crucial for the recovery chances of DOGE and SHIB.
Our Assessment
Based on the current market situation and speculative movements, Shiba Inu may be more at risk of suffering larger losses in the event of a major sell-off than Dogecoin. The negative funding rates and persistently weak open interest suggest that confidence in SHIB is lower. Long-term investors should keep these factors in mind and closely monitor the market development of Bitcoin, as it will have a significant impact on the recovery possibilities of both meme coins.
Sources: Santiment, Akashnath S Journalist, Jibin Mathew George
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