An analysis of historical price trends from Santiment revealed the best time to long or short dog-based memecoins can be determined from trading volume.
What Happened: Santiment, an on-chain social metrics platform, recently published a report on how to use volume and social dominance to play the meme-coin market.
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Whether you've been taking them seriously or not, $DOGE, $SHIB, & $ELON have enjoyed incredible growth in 2021. If you want to long or short them, we've broken down how you can use volume & social dominance to predict the future in our latest insight. https://t.co/rWaHmvIKM4 pic.twitter.com/kw1tMdotN5
— Santiment (@santimentfeed) October 25, 2021
The report analyzed Dogecoin (CRYPTO: DOGE), Shiba Inu (CRYPTO: SHIB) and Dogelon Mars (CRYPTO: ELON), which are up 28%, 419%, and 889%, respectively, over the past month.
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“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 memecoins, at least for now, prices generally seem to be rising when volume is low, and falling when volume is high,” stated Santiment analysts.
The analysts pointed to social dominance as another important indicator that measures a crypto asset’s percentage of discussion across social platforms, compared to all top 100 assets at any given time.
Conversations rose to high points for DOGE and SHIB on Oct. 6 and 7, when both assets experienced local tops, but prices began to fade until the crowd began paying a bit less attention to them.
“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,” stated the report.
Price Action: On Monday morning, DOGE was trading at $0.263139, up 0.54%; ELON was down 1.51% at $0.0000005368; and SHIB was down 4.42% over the same period at $0.000039, losing momentum after Tesla Inc (NASDAQ:TSLA) CEO Elon Musk revealed he did not own any of the memecoin.
Photo by Jaycee Xie on Unsplash