Dogecoin and Shiba Inu: Market Sentiment and Trader Behavior Analysis for 2024
Analyzing Memecoin's Sentiment | Credit: Hameem Sarwar
Key Takeaways
- Meme coins have fallen nearly 64% on average in the past year.
- Dogecoin (DOGE) has performed better but still fell by 58%.
- Shiba Inu (SHIB) declined by 70%, outpacing the average.
While meme coins started 2024 on a bullish note, most have fallen since their yearly highs in March, creating an extremely negative sentiment. The two biggest meme coins, Dogecoin (DOGE) and Shiba Inu (SHIB) were not spared during this decline.
A recent analysis by Santiment outlined the negative sentiment toward meme coins and the factors behind it. Let’s examine the reasons behind the decline and the potential for a future reversal.
Meme Coin Sentiment Suffers
Data from Lookonchain shows that over the past year, meme coins have, on average, fallen nearly 64%. The asset with the worst performance was BOME, at -79%, while that with the best performance was POPCAT, at -44%. Interestingly, meme coins were the best-performing category in March but have underperformed since.
The negative trend since March is to be expected since the crypto market has also fallen during this time. Speculative investments such as meme coins often outpace the market during bullish periods but fall quicker during downward trends.
The two biggest meme coins, DOGE and SHIB, differ in their movement. While the former fell less than the average, the latter dropped more.
Dogecoin Sentiment and Analysis
The Dogecoin sentiment is neutral. Firstly, Dogecoin’s 30-day returns are slightly negative at -0.95%, but the long-term returns are down 23%. Despite this, small retail traders continue holding, as wallets with less than one million DOGE maintain 11.8% of the supply, unchanged since the start of the year, which is the same level as at the start of 2024. So, there is neither FOMO nor FUD, which would cause retail traders to either buy en masse or panic sell.
While Dogecoin discussions are low, this could have occurred because Tron’s SunPump meme coin hype is dying down.
As for the price movement, Dogecoin shows several bullish signs despite its lengthy downtrend. Between Aug. 5 and Sept. 6, DOGE created a double bottom pattern combined with a bullish divergence in the daily Relative Strength Index (RSI) and MACD (green). This enhances the likelihood that DOGE will begin an upward movement.
To confirm the trend reversal, DOGE has to break out from its descending resistance trend line, which has existed since March. Doing so could lead to an increase toward at least the Fibonacci and horizontal resistance at $0.137. A more optimistic target will be the next Fibonacci and horizontal resistance at $0.172.
Conversely, breaking down below the $0.095 horizontal area will invalidate this bullish outlook and could lead to a sharp decline.
Shiba Inu Sentiment and Analysis
The SHIB sentiment and movement are similar to Dogecoin’s, except that it is more bearish. Its 30-day returns (orange) are negative at 3.1%, while the yearly returns (blue) are -33.3%.
The underperformance has caused retail traders to exit altogether. The supply of wallets holding less than one billion SHIB is at its lowest since November 2022. Nearly 97% of the supply is held by wallets with over one billion SHIB, totaling just over $130,000 at the current price.
In turn, sentiment around SHIB has dwindled and is negative, a sign of trader frustration and indifference.
Interestingly, the price action for SHIB is more bullish than that for DOGE. This is because, on top of the double bottom pattern that is combined with bullish divergences (green), SHIB has also broken out from a descending wedge.
So, the price action and indicator readings point to an upward movement. Furthermore, the wave count is bullish, showing a completed five-wave decline (black) since the yearly high.
If an upward movement begins, the closest resistance area will be $0.000020.
Relief Rallies Incoming?
The performance of meme coins has been negative in the past year. Despite their declines, DOGE and SHIB show technical signs of a potential recovery. SHIB’s breakout from its descending wedge makes it more likely to rally first, targeting the $0.000020 resistance, while DOGE must clear a key resistance to confirm its reversal
Shiba Inu (SHIB) Price Poised for 130% Gain – Double Bottom Pattern Explained
