Cryptocurrency Traders Show Appetite for Risk as Dogecoin and Shiba Inu Surge 9%
In the past 24 hours, two prominent meme-based cryptocurrencies, Dogecoin (DOGE) and Shiba Inu (SHIB), have experienced a noteworthy surge of approximately 9%. This sudden increase suggests that cryptocurrency traders are increasingly venturing into speculative and high-risk investments, likely influenced by Bitcoin's recent robust performance.
The surge in SHIB and DOGE prices occurred seemingly without any immediate or apparent catalysts. However, the price spikes coincided with an announcement from X, formerly known as Twitter, regarding the introduction of a video calling feature for premium users. It's worth noting that some market participants have historically anticipated that X might eventually include DOGE as a payment option, contributing to the prevailing sense of irrational enthusiasm.
Elon Musk, the CEO of X, has consistently expressed his affinity for Dogecoin, even devoting a segment to the meme coin during an appearance on the popular television show "Saturday Night Live" in 2021. Furthermore, Twitter briefly adopted the Dogecoin logo as its own logo in April, a move that triggered a rally resulting in gains of up to 37% for certain traders.
???? video & audio calling is available only for ???? Premium Users.— DogeDesigner (@cb_doge) October 26, 2023
Its great to see more and more new features being added to ???? Premium. It only costs ~23 cents/day if bought annually via web. Worth every cent. pic.twitter.com/W0Vb1rUIDI
Data indicates that cumulative trading volumes for these tokens surged from $350 million on Monday to an impressive $1.2 billion on Thursday.
In addition to the price surge, open interest in DOGE and SHIB futures exhibited a significant increase, surging by more than 50%. This surge in open interest suggests that traders are placing more substantial bets, anticipating increased volatility in the days ahead.
While the hope of a spot Bitcoin exchange-traded fund (ETF) played a pivotal role in driving Bitcoin prices up by 30% over the past week, with Ethereum (ETH), Solana (SOL), and XRP (XRP) also registering gains of up to 40%, DOGE and SHIB, while still posting a respectable 15% increase, fell short in comparison to these other major cryptocurrencies. This performance suggests that despite their inherent volatility, DOGE and SHIB underperformed relative to other significant digital assets.
It's worth noting that historical data highlights a recurring trend where substantial price surges in DOGE have often coincided with local market tops for Bitcoin and other major tokens. According to a report by the blockchain analytics firm Santiment from December 2022, there were eight instances during that year when Dogecoin's price surges foreshadowed broader market corrections, impacting both Bitcoin and the wider cryptocurrency market.