Dogecoin and Shiba Inu consolidating, analysts predict further drop in price
- Dogecoin accounts for 26% of Robinhood's revenue in Q22021, as traders bought the meme coin aggressively.
- Both Dogecoin and Shiba Inu have consolidated for the past two weeks.
- Analysts predict further meltdown in Shiba Inu-themed meme coins.
- Dogecoin correlation with Bitcoin is on the rise, and DOGE prepares for a 30% drop.
That a handful of wallet addresses hold nearly 91% of all Dogecoin in circulation and the high centralization of the Shiba-Inu cryptocurrency emerges as a cause of concern among analysts and traders.
Dogecoin and Shiba Inu gear up for nearly 30% price drop
Shiba Inu-themed cryptocurrencies have noted a drop in price in the past two weeks. In May 2021, nearly a trillion dollars were shaved off of the overall cryptocurrency market capitalization.
Since the bloodbath, altcoins and layer-two scaling solutions have noted double-digit gains, unlike meme coins SHIB and DOGE. SHIB and DOGE are over 60% away from their all-time high in May 2021.
In the second quarter of 2021, Robinhood, the commission-free stock trading and investing platform, revealed that DOGE accounted for 26% of the exchange's revenue. Despite aggressive DOGE buying from traders on Robinhood, the meme coin's wealth distribution appears lopsided, with 91% of the altcoin's circulating supply held in whale wallets (wallets that hold 100,000 to 1 million DOGE). Whale wallets account for less than 1% of the total addresses on the DOGE network.
Dogecoin relative supply held bands.
Analysts and traders heavily criticize the centralization of DOGE's supply. This criticism likely accounts for a drop in interest of traders in the Shiba Inu-themed crypto.
In the case of the Shiba Inu coin, the community is awaiting a listing on Coinbase and Robinhood exchange platforms. Neither exchange has issued an official announcement.
The developers behind the cryptocurrency implemented a burn mechanism in response to the traders' request. It was expected that implementing burn will drive the altcoin's price higher, however, since August 22 SHIB price has dropped further. SHIB has noted a drop of nearly 14% in price in the past two weeks, and the consolidation is expected to continue.
Analysts at FXStreet have predicted that the altcoin's price is preparing for a 30% crash since it lost crucial support earlier this week. The next price target is $0.22.
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.
