Dogecoin [DOGE] Faces Market Corrections: Will It Recover Soon?

• This past week has seen a significant drop in the prices of popular memecoins such as Dogecoin (DOGE) and Shiba Inu (SHIB).
• In addition to the price declines, there has been notable reduction in the open interests and MVRV (Market Value to Realized Value) ratios of both cryptocurrencies.
• A broader market correction in the crypto sphere seems to be impacting memecoins, with both DOGE and SHIB experiencing notable downturns.

The crypto memecoin market faces a downturn as major players DOGE and SHIB see price declines, sparking concerns among investors.

Price Declines in the Memecoin Market

The last week has been harsh for memecoin enthusiasts as Dogecoin (DOGE) saw its price drop over 5%, trading at $0.126, and Shiba Inu (SHIB) experienced a similar decline, now valued at $0.0000163. These declines are reflective of a broader disinterest in these asset classes among investors, as indicated by CoinMarketCap’s latest data.

Reduction in Open Interests and MVRV Ratios

The declining trend isn’t just limited to prices. According to IntoTheBlock’s data, a significant percentage of investors are still in profit—75% for DOGE and 48% for SHIB—yet the open interests in both memecoins have also fallen. Typically, a fall in open interest suggests a potential for trend reversal but also indicates waning investor engagement.

Social Dominance and Sentiment Analysis

While memecoins like DOGE and SHIB have previously enjoyed high levels of social dominance, they are now trailing far behind Bitcoin (BTC). Bitcoin’s social dominance stands at 17.9%, contrasting sharply with DOGE’s 1.49% and SHIB’s 0.24%. This dip points to a broader disinterest and lack of conversation surrounding these memecoins.

On-Chain Data Insights: Bullish and Bearish Sentiments

On-chain data provides further insights. DOGE’s weighted sentiment remains in the negative zone, indicating prevailing bearish sentiment. Contrarily, SHIB’s sentiment appears to be turning positive, suggesting some investors are optimistic about a recovery. Lower MVRV ratios for both suggest we might be near market bottoms, which could precede a price increase.

Future Projections: Recovery or Further Decline?

As per CFGI.io’s Fear and Greed Index, both DOGE and SHIB currently exhibit a neutral sentiment. Liquidation levels offer further clues; DOGE might recover to $0.137 or even $0.14 if a trend reversal occurs, while SHIB could potentially move up to $0.0000176. Conversely, continued downtrends might see SHIB plunging to $0.0000155.

Conclusion

In summary, the memecoin market is undergoing significant corrections, driven by declining prices, reduced open interests, and fluctuating social sentiments. While there are signs of potential recoveries, the market presents a neutral outlook, leaving open the direction it may take. Investors are advised to closely monitor these trends for actionable insights.