Memecoins
Dogecoin vs Shiba Inu – This memecoin will lose a lot when selling wave hits
- Both Dogecoin and Shiba Inu have long-term holders with a decent profit
- Speculators seemed more eager to short one of them than the other
Dogemoneta [DOGE] AND Shiba Inu [SHIB] recorded losses 11.4% and 8.5%, respectively, in the last week. Both memecoin they have gained just over 10% in the last 36 hours, meaning losses were much larger at last week’s low point.
Bitcoin [BTC], at the time of writing, was also trading below $60,000, while sentiment in the market was worrying. Ergo, it didn’t seem clear how low this downward trend could go.
Therefore, AMBCrypto analyzed futures market data to see whether DOGE or SHIB had formed a potential bottom before their bullish reversal.
Comparison of speculator sentiment behind Dogecoin and Shiba Inu
Source: Most Holy
Open Interest behind Shiba Inu has been steadily declining since the first week of March. The price has also been in a retracement phase. Together, they highlighted a consistent lack of conviction on the part of the bulls.
Some short-term rebounds saw a sharp spike in OI, but these were quickly reversed. It turns out that more and more market participants have been forced to stay on the sidelines. Meanwhile, Dogecoin was different.
It also saw a decline in OI, but most of it occurred in the second half of April. The price action showed that its rebound towards the end of March was greater, 86% for DOGE compared to 39% for SHIB. This explains the difference in open interest and therefore sentiment.
It is fair to conclude that both mem coins are under strong pressure from sellers. Both projected bearish sentiment, but Shiba Inu was weak for a longer period.
Which of the two is closer to forming a bottom?
Source: Most Holy
Given that SHIB has retraced for a longer period, could it be the closest token to bottom formation? The funding rate behind Shiba Inu has been negative for many consecutive days in April. It extends from April 13th to 21st, and from April 27th to May 2nd.
In contrast, DOGE has seen a slightly negative funding rate on Binance for a handful of days over the past two weeks. This suggested that market participants were more eager to sell SHIB than DOGE, reinforcing the bearish sentiment once again.
Realistic or not, that’s it DOGE’s market capitalization in BTC terms
Finally, the 365-day MVRV ratio of both memecoins was quite good standing at 25.58% and 28.84% for Dogecoin and Shiba Inu respectively. This showed that despite the recent losses, holders were still up by a respectable amount.
It is likely that DOGE and SHIB will need Bitcoin to regain its bullish momentum before they have a chance to recover. Until that happens, it is reasonable to conclude that SHIB is more likely to post heavier losses than DOGE in the event of a large sell-off.