The memecoin phenomenon didn’t prove as effective in the last month’s start of year crypto market rally, as the gains of the top cryptocurrencies in this category barely outperformed Bitcoin. The monthly gain of BTC stood at 44.5%, while the top two meme-based coins DOGE and SHIB gained 27% and 40.7%, respectively.
Dogecoin is losing its popularity as its most prominent supporter Elon Musk is reportedly developing an independent Twitter Coin instead of integrating his favorite cryptocurrency with the social media platform owned by the entrepreneur.
For the greater part of 2022, DOGE/USD performed poorly except for when Elon Musk acquired Twitter. The acquisition raised hopes in the Dogecoin community about increased cryptocurrency usage.
However, without any tangible announcements or reports from Twitter hinting at Dogecoin usage, the 100% price surge from October 2022 reversed in the following two months. The Google search volume for the token has also subsided since Q1 2022.
Dogecoin is losing its popularity as its most prominent supporter Elon Musk is reportedly developing an independent Twitter Coin instead of integrating his favorite cryptocurrency with the social media platform owned by the entrepreneur.
For the greater part of 2022, DOGE/USD performed poorly except for when Elon Musk acquired Twitter. The acquisition raised hopes in the Dogecoin community about increased cryptocurrency usage.
However, without any tangible announcements or reports from Twitter hinting at Dogecoin usage, the 100% price surge from October 2022 reversed in the following two months. The Google search volume for the token has also subsided since Q1 2022.
Lastly, the on-chain data for Dogecoin suggests that the price may be overpriced. The Network Value to Transaction Value (NVT) ratio metric is a price-to-earning ratio equivalent for the cryptocurrency markets. The metric measures the ratio of the market capitalization of the token against its transaction volume. Higher transaction volume compared to the market value corresponds to low NVT readings.
Coinmetrics’ historic NVT chart of Dogecoin suggests that the token could be overpriced. For the last eight years, the NFT ratio has oscillated between 10 and 100, with a few outliers during bull markets. Dogecoin’s NVT metric hasn’t tapped the bottom of its long-term range since mid-2021, which exposes it to more downside risk.
Related: Rumor has it that Dogecoin could shift to proof-of-stake
Shiba Inu’s brand building strategy may not be enough
Like Dogecoin, the weakening meme coin narrative affected the buying strength of Shiba Inu. The second largest meme coin has been working on enhancing the brand value of Shiba Inu by forming partnerships with clothing brands like Bugatti Group and English designer John Richmond.
The Google Trend score of Shiba Inu shows a similar depressing pattern since early 2022 as Dogecoin, with no spikes in search volume since the crypto bull mania of 2021 subsided in Q1 2022.
Like Dogecoin, the Shiba community also has an independent blockchain, Shibarium, which is owned by the Shiba community. However, the blockchain’s gas-paying token is BONE instead of SHIB, which brings no real value to the token holders of SHIB.
The total balance of SHIB on crypto exchanges jumped earlier in January, which is a negative sign, exposing the token to more sell-offs. On the contrary, the smart money wallets identified by Nansen increased their holdings slightly on Jan. 25, which may add some strength to the recent rally.
Generally, it appears that the meme coin phenomenon from 2021 has lost its steam considerably. While the meme coins are moving with the rest of the market, their performance has been average. Improvements in the projects by the team or community have become essential to push these tokens back up.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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