Dogecoin and Shiba Inu Exhibit Mixed On-Chain Signals: One May Surge While the Other Dips, But There’s a Catch
The two most prominent meme-inspired cryptocurrencies, Dogecoin (DOGE) and Shiba Inu (SHIB), have diverged recently in on-chain activity, likely leading one to surge while the other struggles. Analysis of the memecoins shows Dogecoin expanding on positive metrics while troubling outflows plague Shiba Inu.
Surging Network Growth for Dogecoin
According to cryptocurrency analyst Ali (@ali_charts), Dogecoin has seen a “notable network expansion” in recent weeks. Ali points to Dogecoin experiencing a “steady rise in the creation of new $DOGE addresses, consistently reaching new highs.”
More addresses and overall network usage indicates increased adoption and activity around the memecoin. As Ali notes, this growth “is a promising sign for #DOGE as it lays the groundwork for a potential upward price action.” The creation of new Dogecoin wallets and transactions shows robust fundamentals for the project.
Concerning Outflows from Shiba Inu
In contrast to Dogecoin’s grassroots growth, data around meme token competitor Shiba Inu paints a troubling picture. According to the same analyst, there have been massive SHIB withdrawals from known cryptocurrency exchanges since November 2023.
Specifically, Ali notes that “over 8 trillion $SHIB” have exited exchange wallets over the past few months. With a current value of around $88 million, this unusually large outflow of SHIB from trading platforms indicates falling confidence in the former meme darling.
What Does This Mean for Prices?
As the two most prominent memecoins take divergent paths in network metrics, expectations for future price action likely depends on the coin. For Dogecoin, expanding addresses and a growing community base as noted by Ali provides a solid foundation for potential price increases as usage continues rising.
Meanwhile, the cohort of investors withdrawing SHIB en masse signals eroding institutional and retail interest in Shiba Inu. Without exchanges and traders willing to hold the asset, downward pressure on SHIB’s already battered price seems inevitable.
So while Dogecoin appears positioned for takeoff as enthusiasm expands, beleaguered Shiba Inu seems unlikely to avoid further declines amidst declining exchange support. Traders should note the radically different trajectories as they consider expectations for these feuding memecoins. One looks ready for liftoff, while the other stares into the abyss.
Withdrawal for Self-Custody
However, there is another potential explanation for the outflows – investors moving their SHIB holdings into private, self-custody wallets for security reasons. If much of the ~8 trillion tokens exiting exchanges are going into personal storage rather than sales, it could indicate users committed to SHIB for the long-term even amidst the bear market.
The withdrawals may not reflect fading interest but rather a shift towards traders securing their own tokens which could still see price resurgences later. For a clearer signal, further monitoring of on-chain data like transactions and activity levels can determine if exchange outflow trends reflect holders losing faith or simply taking custody into their own hands.
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