When Volume and Dominance Show Tops, Meme Coins See Drops

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brianq
Oct 25, 2021

Whether you're a fan of the recent cryptocurrency pricing trends or not, the rise of the dog-based 'meme' coins have been evident in 2021. And particularly so over the past month. Whether you're a Bitcoin or Ethereum maximalist, or you simply have been away from the crypto game for a while, here are some highlights for the big three polarizing assets:


  • Doge Coin is up 28% in the past month, and it's been in recovery mode following a steep decline ever since its staggering takeoff in April and May that saw its price surge above $0.70.
  • Shiba Inu is up 419% in the past month, with several price spikes coming in bursts. These bursts typically seem to be coming whenever negative sentiment takes over, which aligns with Santiment's mantra of 'Prices move in the direction of the crowd's least expectation'.
  • Dogelon Mars, Elon Musk's aptly-named latest meme coin project to take flight, is up a jawdropping 889% over the past month. Prices continue to surge, which interestingly seem to happen most commonly when Bitcoin is seeing a mild pullback.


So whether you're interested in shorting or longing these assets, how can we make some predictions to try and wrangle in future price movements for our advantage? It's often as simple as looking at trading volume:


Volume is a good reflection of increased traders attempting to jump in, mostly on price rises. We can see just over the past month how local price tops occurred in tandem with volume hitting peaks. In the case of these adorable meme coins, at least for now, prices generally seem to be rising when volume is low, and falling when volume is high.


Another important thing we can take a look at is social dominance, which measures the percentage of discussion that is being tracked across social platforms, compared to the discussion of all top 100 assets at any given time.


Note how when conversations rose to high points for DOGE and SHIB on October 6th and 7th, both assets experienced local tops and prices began to fade until the crowd began paying a bit less attention to them:


Also note how all three of these assets are being discussed at very high levels at the moment. Both DOGE and SHIB are seeing some price correction at the moment, while ELON is mostly staying flat. But pay attention to when both volume and social dominance are simultaneously peaking for one of these three assets to find tops. Or vice versa - pay attention to when others aren't to find bottoms, at least until the hype on dog-related cryptocurrencies begin to cool off!


Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.



DOGESHIBELONSTRATEGIES/ALPHA
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brianq
Oct 25, 2021

Thanks for reading!

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2

Assets from this insight

Dogelon Mars logo

Dogelon MarsELON

$ 0.000001

26.71%in last 7d
Dogecoin logo

DogecoinDOGE

$ 0.178132

17.29%in last 7d
SHIBA INU logo

SHIBA INUSHIB

$ 0.000037

20.91%in last 7d

Conversations (2)

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<email hidden>

2 months ago

There is definitely a correlation. How would you ever be able to predict social media. That would be something.

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<email hidden>

28 days ago

This is helpful