Dogecoin and Shiba Inu could extend gains for these three reasons

Dogecoin, and Shiba Inu retail investors accumulate the meme tokens while whales distribute their holdings.
Less than 50% of the wallets holding DOGE and SHIB are currently profitable, selling pressure on meme coins could reduce.
DOGE, and SHIB extend gains by nearly 2% on Wednesday.

Dogecoin (DOGE), and Shiba Inu (SHIB) extend their gains on Wednesday as the selling pressure on the meme coins reduced. Data from the on-chain intelligence tracker IntoTheBlock shows that less than 50% of wallet addresses holding these meme coins are currently profitable.

This metric indicates that the selling pressure on DOGE and SHIB has reduced. The meme coin category has noted a surge in market capitalization as the market recovers from the recent correction.

Meme coins added 4.5% to their market cap in the last 24 hours, reaching $45.83 billion.

Dogecoin, Shiba Inu on-chain metrics support gains

Dog-themed meme coins Dogecoin and Shiba Inu extend their gains on Wednesday, recovering from the broad crypto market correction. Data from crypto intelligence tracker IntoTheBlock shows that 49.70% of wallet addresses holding DOGE are profitable at $0.1093, and 32.26% of investors with SHIB in their wallets are profitable at $0.000017.

The percentage of investors profitable at the current price levels is under 50%, so the percentage of traders underwater (sitting on unrealized losses) is higher, signaling selling pressure on the meme coins will be relatively low as traders sitting on unrealized losses are typically less likely to sell their asset holdings to reach the breakeven price.

DOGE profitable/ underwater wallets percentage

SHIB profitable/ underwater wallets percentage

Santiment data shows that Dogecoin and Shiba Inu whales have distributed their holdings, while DOGE/ SHIB investors and retail traders accumulated the assets through the “dip” between July 1 and 10.

While whales shedding their asset holdings may be considered bearish, accumulation by small wallet investors has aided against a mass sell-off in the two meme coins.

Dogecoin supply distribution

Shiba Inu supply distribution

IntoTheBlock data shows that sentiment among Dogecoin and Shiba Inu traders is neutral on Wednesday. DOGE and SHIB’s correlation with Bitcoin is 0.94 and 0.88, respectively. As Bitcoin sustains above key support at $57,000 and extends its rally, the meme coins will likely follow suit.

On Wednesday, Dogecoin extends gains by 2.12% and Shiba Inu rallies 2.08% on Binance. At the time of writing, DOGE trades at $0.1098 and SHIB at $0.000016.

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.