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- Bitcoin price outlook is pushing a bullish narrative for Dogecoin, Shiba Inu, and PEPE.
- Despite visible corrections, analysts have positive projections for these memecoins.
Memecoins crashed at the beginning of the week in response to a brief decline in Bitcoin (BTC), the world’s largest digital asset. Now that Bitcoin has reclaimed $100,000, the top three memecoins have started rebounding. On Thursday, Dogecoin (DOGE) and Shiba Inu (SHIB) posted slight gains, while PEPE corrected.
Favorable Onchain Metrics
Inspired by a bullish recovery, the market capitalization of the meme coin sector increased by 7% in the last 24 hours. According to CoinGecko data, the meme coin market capitalization now stands at $133 billion, while daily trading volume rose to $20.9 billion.
Onchain metrics even suggest further gains for DOGE, SHIB, and PEPE. Dogecoin rose modestly on Thursday, trading around $0.41500, nearly 14% behind its 2024 high of $0.48434.
One notable factor contributing to DOGE’s price recovery this week is the liquidation of over-leveraged trades across derivatives exchanges. According to Coinglass data, derivatives transaction volume has decreased by 34% in the last 24 hours. Within the same period, Open Interest (OI), or the value of open derivatives contracts across exchanges, increased by almost 5%.
Another metric indicating an optimistic outlook is the Long-to-short ratio. This metric measures the balance of long (buy) and short (sell) positions on derivatives exchanges, including Binance and OKX, and exceeds 4.
A reading higher than 1 means most traders are in long positions as the market sentiment is positive. The average long-to-short ratio is 0.9573, but derivatives traders are bullish on DOGE across exchanges.
Meanwhile, SHIB and PEPE also recorded an increase in Open Interest on Thursday. 1000PEPE, a financial derivative created from PEPE/USD x 1000 Index price, experienced a 3.22% gain in OI. On the other hand, SHIB Open Interest increased slightly by less than 0.5%.
How Bitcoin Profit-Taking Can Influence Dogecoin, SHIB, and PEPE
Meanwhile, onchain Santiment data reveals positive spikes in the network realized profit/loss metric for Bitcoin. A huge increase in this metric typically indicates intense profit-taking among traders.
In previous cycles, traders transferred capital from Bitcoin to altcoins after making profits, a process called “capital rotation.”
If the pattern repeats this cycle, Bitcoin traders could transfer accumulated profits to meme coins. This would further boost demand and strengthen the bullish case for DOGE, SHIB, and PEPE. As of this writing, Bitcoin has been trading at $100,051, down 0.64% in the last 24 hours.
The recent price surges coincided with rising trading volumes, a positive indicator. The trading volume for DOGE, SHIB, and PEPE increased substantially between November 6 and December 10.
Crypto analyst Ali Martinez has raised an optimistic forecast for DOGE. The analyst predicts a rise to $1.50 in the next four weeks and a longer-term target of $3, per a CNF report. Regarding SHIB, analysts predicted the memecoin could climb to reach $0.000033684 by year-end.
Finally, crypto analyst Javon Marks disclosed in a CNF report that PEPE’s recent break from a falling wedge pattern points to a potential 65% rally.
