Memecoins record decline and may undergo further correction
The memecoins Dogecoin (DOGE), Shiba Inu (SHIB) and Pepe (PEPE) registered slight drops this Tuesday (15), reversing part of the gains obtained the previous day. According to on-chain data from crypto intelligence platform Santiment, these tokens may undergo a further price correction.
This is because the number of active addresses for these memecoins is falling. Furthermore, market value to realized value (MVRV) indicators suggest that the three cryptocurrencies are overvalued.
The number of active addresses is an important on-chain indicator. It reflects the activity of wallets that hold a token, helping to identify changes in demand and relevance of the currency among market participants. In the case of Dogecoin, active addresses reached a six-month high on October 10 at 133,880 addresses. Since then, that number has decreased drastically, according to data from Santiment.
Memecoins face bearish sentiment
Despite the drop in active addresses, the price of Dogecoin has not yet followed this decline. While the meme cryptocurrency fell 1.7% on October 10, it has risen around 10% since then, consolidating around $0.1166 this Tuesday.
For Shiba Inu and Pepe, active addresses also fell on October 13, with a slight recovery since then. However, these numbers remain below the average of the last six months, indicating a possible loss of interest from traders.
The 30-day MVRV indicator, which is used to identify whether a token is under or overvalued, showed positive values for DOGE, SHIB and PEPE, with 4.93%, 9.47% and 13.52%, respectively. These numbers indicate that the three cryptocurrencies are overvalued at the moment. Pepe is the most overrated among them.
These positive values in MVRV are often interpreted as a sell signal. This could increase selling pressure on these tokens on exchanges. In previous events, when MVRV peaks, a price correction often follows.
Additionally, transaction volume for Dogecoin, Shiba Inu, and Pepe reached its lowest level in the last 15 days. This is another sign that traders' interest in these coins may be waning. Falling trading volumes are generally interpreted as an indication of loss of interest and a possible decline in prices.
At the moment, Dogecoin is trading at US$0.1166 (-0.33% on the day), Shiba Inu at US$0.000018 (-0.9%) and PEPE at US$0.000010 (-2 .2%).