Dogecoin and Shiba Inu consolidate as correlation with Bitcoin increases
- Analysts have a bearish outlook on Shiba Inu-themed coins.
- The CEO of Bitstamp slammed small cryptocurrencies like Dogecoin, stating that Elon Musk's tweets lead to DOGE price swings.
- SHIB's NFT card collection KriptoKards Shiba is on sale at OpenSea, though traders are concerned whether the 25 cards are worth paying for.
Following a week-long price rally, DOGE and SHIB are consolidating. Analysts have a bearish outlook on SHIB's price.
World's oldest cryptocurrency exchange slams memecoin hype
Bitstamp CEO Julian Sawyer is not keen on Shiba Inu-themed coins. According to Sawyer, Bitstamp will not engage with smaller cryptocurrencies such as Dogecoin. Sawyer criticized Tesla CEO Elon Musk's tweets that led to DOGE price swings.
Sawyer said:
Fundamentally, you have to look at the basics, which is why we only want to list those assets that have some substance behind them, some liquidity.
The Bitstamp CEO's criticism is backed by Dogecoin's recent price swings triggered by Musk's tweet.
It is interesting to note that influencers that promote Dogecoin on Twitter and social media personally do not own enough DOGE to benefit from price swings. This strengthens the coin’s community and reaffirms confidence of investors in the crypto.
Mark Cuban, billionaire entrepreneur and owner of Dallas Mavericks, shared details of his Doge holdings in a recent tweet
The Mavs have what we sold in merch. I personally own $494 worth of DOGE
— Mark Cuban (@mcuban) August 15, 2021
When it comes to DOGE or SHIB, the top concerns of traders and exchanges are lack of liquidity and centralization. 63% of Dogecoin and nearly 90% of Shiba Inu coin's supply is concentrated in wallets of large holders based on IntoTheBlock data.
Cryptocurrencies with low liquidity run the risk of a spike in price due to non-events like tweets from influencers, thus making them highly volatile to hold in the long term.
Influencers like Musk and Cuban consistently promote Shiba Inu-themed cryptocurrencies for their utility and strong community; recently, these attempts have failed at influencing the price positively.
Dogecoin's correlation with leading cryptocurrency Bitcoin has increased; at the time of writing, it is 0.88. This has emerged as a factor that negatively influences the price.
BTC is currently range-bound between $45,000 and $48,000, and the rising correlation led to a consolidation in DOGE's price.
DOGE's rival SHIB had a successful week before its price plummeted to the $0.000008 level. The launch of KriptoKards SHIBA NFT card collection triggered a run to $0.000009. Traders are now unsure if the cards are worth the quoted price on NFT marketplace OpenSea. The floor price for the cards is $150 or 0.05 ETH.
Overall, despite recent developments, traders' outlook on the top two Shiba Inu-themed cryptos is largely bearish.
According to analysts at FXStreet, SHIB is primed to retrace before the next leg up.
Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
