Memecoins
Dogecoin vs Shiba Inu – This memecoin will lose big when selling wave hits
- Dogecoin and Shiba Inu both have long-term holders with a decent profit
- Speculators seemed more willing to short one of them than the other.
Dogecoin [DOGE] And Shiba Inu [SHIB] recorded losses of 11.4% and 8.5%, respectively, over the past week. Both memecoins have gained just over 10% in the past 36 hours, meaning losses were much greater at last week’s lowest point.
Bitcoin [BTC], at the time of writing, was also trading below $60,000, amid fearful market sentiment. Therefore, it seemed unclear how far this downward trend could go.
Therefore, AMBCrypto analyzed futures market data to see if DOGE or SHIB had formed a potential bottom before their bullish reversal.
Comparing Speculator Sentiment Behind Dogecoin and Shiba Inu
Source: Feeling
Open interest behind Shiba Inu has been on a steady downward trend since the first week of March. The price is also in a retracement phase. Together, they highlighted a consistent lack of conviction from the bulls.
Some short-term rallies saw a large spike in OI, but these were quickly reversed. The result is that more and more market players are being sidelined. During this time, Dogecoin was different.
There was also a decline in IO, but most of it occurred in the second half of April. 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 memory coins are under heavy pressure from sellers. Both projected bearish sentiment, but Shiba Inu has been weak for longer.
Which of the two is closest to forming a bottom?
Source: Feeling
Since SHIB has retraced over a longer time frame, could it be the token closest to the bottom formation? The funding rate behind Shiba Inu was negative for several consecutive days in April. This runs from April 13-21 and April 27-May 2.
On the contrary, DOGE saw a slightly negative funding rate on Binance for a few days over the past two weeks. This suggests that market participants were more eager to short SHIB than DOGE, once again reinforcing bearish sentiment.
Realistic or not, here it is Market capitalization of DOGE in BTC terms
Finally, the 365-day MVRV ratio of both memecoins was quite healthy, at 25.58% and 28.84% for Dogecoin and Shiba Inu, respectively. This shows that despite recent losses, holders are still up 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 on their own. In the meantime, it is reasonable to conclude that SHIB is more likely to record heavier losses than DOGE in the event of a strong wave of selling.