Dogecoin, Shiba Inu, PEPE recovery depends on these three factors
- Meme coin market capitalization declined 5% in the past 24 hours, top five tokens erase between 4% and 14% of their value.
- Dogecoin, Shiba Inu, and PEPE note relatively low activity from traders on the daily timeframe.
- Two of the top three meme coins are currently undervalued according to the MVRV ratio metric.
- Dogecoin and PEPE are highly correlated with Bitcoin, therefore, recovery depends on BTC price trend as well.
- Shiba Inu wallets are mostly sitting on unrealized losses while Dogecoin and PEPE crumble under mounting selling pressure from profitable traders.
Meme coins erased 5.3% of their market capitalization in the last 24 hours, down to $48.81 billion. The top three meme coins, Dogecoin (DOGE), Shiba Inu (SHIB), and PEPE, are hit by a correction on Thursday.
On-chain metrics from Santiment identify a lack of trade activity and mounting selling pressure on the meme coins.
DOGE trades at $0.1213, SHIB at $0.00001596 and PEPE at $0.00001063 at the time of writing.
These conditions could push Dogecoin, Shiba Inu, and PEPE higher
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Correlation with Bitcoin
Dogecoin and PEPE are highly correlated with Bitcoin price. The two meme coins enjoy a 0.97 and 0.92 correlation with BTC, per IntoTheBlock data. Therefore, its price trend depends on Bitcoin price, in addition to other market movers and on-chain metrics.
Bitcoin is ranging under key resistance at $65,000 early on Thursday, down nearly 2% in the past seven days. Traders are cautious of US macroeconomic events and tread carefully, expecting volatility in crypto prices this week.
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Sentiment and trading activity
Dogecoin traders are bullish, while Shiba Inu notes a neutral sentiment, and bearish sentiment is prevalent among PEPE holders.
This data from crypto intelligence tracker IntoTheBlock shows mixed sentiment among traders, which is likely responsible for their lack of enthusiasm and the dwindling activity.
Santiment’s chart below shows the active addresses in the last 24 hours for the top three meme coins, against the Dogecoin price. Waning address activity is a sign that the asset is losing relevance among traders.
 [13.05.23, 01 Aug, 2024]-638581053868120409.png)
Active addresses for DOGE, SHIB, PEPE vs. Dogecoin price
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Selling pressure on meme coins
The IntoTheBlock’s Global In/Out of the Money (GIOM) metric measures the profitability of wallet addresses holding an asset. The data shows that 71.39% of wallet addresses holding Dogecoin are profitable at $0.1205, meaning it is likely that these investors could take profits and increase the selling pressure on the largest meme coin.
Higher selling pressure negatively influences the price of an asset.
GIOM Dogecoin
Similarly for PEPE, 80.38% of the wallet holders are profitable. This implies a higher likelihood of the meme coin suffering from rising selling pressure.
GIOM PEPE
Shiba Inu is in a different situation. 67% of the wallet addresses are sitting on unrealized losses and are, therefore, less likely to close their positions. Consequently, SHIB has room for recovery.
GIOM SHIB
MVRV metric shows Dogecoin and Shiba Inu are undervalued
The Santiment’s Market Value to Realized Value (MVRV) metric used to identify whether an asset is undervalued or overvalued shows that Dogecoin and SHIB are currently undervalued. The 30-day MVRV for the two assets is -4.135% and -8.215%, as seen in the Santiment’s chart below.
In simple terms, a negative MVRV value means the asset is “undervalued” on average and, if all the coins held by traders were sold, a higher percentage would realize losses at the current price level. This makes traders less likely to shed their holdings, meaning Dogecoin and Shiba Inu could soon begin their recovery.
For PEPE, the 30-day MVRV is 0.165%.
 [13.10.53, 01 Aug, 2024]-638581055440839963.png)
MVRV ratio for Dogecoin, Shiba Inu, and PEPE
Coin98 data shows the number of wallet holders of different meme coins in the past week in a recent tweet on X:
The amount of token holders of several well-known memecoins (tracked in the last 7D)
— Coin98 Analytics (@Coin98Analytics) August 1, 2024
Ethereum and Base memecoins have shown to captivate many holders. Meanwhile, Solana outnumbered in terms of memecoin diversity pic.twitter.com/cOKdMd8dhw
According to the data, Ethereum and Base meme coins dominate the number of holders while Solana outperforms in meme coin diversity.
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.
