Shiba Inu themed meme coin rallies hit roadblock: SHIB, DOGE, FLOKI, ELON

Shiba Inu themed meme coins SHIB, Dogecoin (DOGE), Floki Inu (FLOKI) and Dogelon Mars (ELON) wiped out their recent gains driven partly by Twitter’s logo change. Meme coin price rallies are popular for being typically fleeting. 

Historically, meme coin holders engage in profit-taking when the price hits a local top. 

Also read: Ethereum (ETH) price breaks $1,900 ahead of Shanghai hard fork, what's next for Ethereum

Shiba Inu themed meme coin rallies grind to a halt

Shiba Inu themed meme coins yielded gains for holders in response to the recent logo change of Twitter. DOGE offered double-digit gains to holders overnight while SHIB, FLOKI and ELON followed the lead of the largest meme coin in the ecosystem. 

Meme coin price rallies have been notably fleeting. A spike in profit-taking by holders drive the asset prices lower in the short-term, before another catalyst or driver comes along. This thesis is supported by on-chain metrics. 

Dogecoin whales engage in profit-taking

As seen in the below chart from crypto intelligence tracker Santiment, there is a spike in profit-taking by whales as large wallet investors in different segments, holding between 100,000 to 1,000,000 DOGE, 10 million and 100 million DOGE tokens shed their holdings.

DOGE whale holdings 

Large wallet investors have engaged in profit-taking in the past when price climbs to the local top, as seen in the last week of January 2023. This trend is responsible for fleeting rallies in meme coins like Dogecoin. 

Shiba Inu whales and holder activity

A similar trend to Dogecoin has been observed in Shiba Inu. A spike in the meme coin’s price coincides with a rise in trade volume and activity of SHIB holders, as seen in the price chart below. 

SHIB price v. trade volume and active addresses 

In terms of whale behavior, the cohort that holds between 1 million and 10 million SHIB, typically accumulates through the dip and sheds holdings during local tops or bullish events in meme coins. 

SHIB whales shed holdings 

FLOKI and ELON 

In the meme coin named after Musk’s dog, a similar trend has been noted in terms of daily active addresses and transaction volume. A spike in price drives the metrics higher, signaling interest and activity from FLOKI holders, while price declines coincide with periods of less activity. 

FLOKI Daily active addresses, transaction volume and price 

The whale behavior shows no specific pattern in the case of FLOKI, unlike SHIB and DOGE. 

Interestingly, in the case of ELON, the supply held by whales decreases with a spike in ELON price. This implies whales shed their holdings and engage in profit-taking, slowing down the meme coin’s price rally. Network growth and transaction volume spike in response to price rallies in the meme coin, similar to FLOKI. 

ELON supply held by top addresses, whale transaction count

The count of whale transactions greater than $100,000 increases during local tops in ELON price, similar to the trend observed in its meme coin competitors, other Shiba Inu themed tokens. 

Will meme coins survive changing narratives?

The meme coin narrative dominated the crypto ecosystem in 2021-2022. However the price rally in Layer 2 coins, Zero Knowledge (ZK) coins and Artificial Intelligence (AI) tokens has ushered in several new narratives for crypto market participants. 

As seen through on-chain metrics, the “fleeting” nature of meme coin price rallies and the need of a catalyst or driver to push prices higher each time could drag down these tokens in terms of relevance and adoption in the crypto community. 

Short-term holders that engage in speculation and profit-taking are more likely to be drawn to meme coins while large wallet investors and other classes of retail traders turn to the newest narratives in crypto, hunting for higher gains and price appreciation in the long-term.