Dogecoin (DOGE), Shiba Inu (SHIB), and Pepe (PEPE) all fell today, giving back some of the gains they made on Monday. On-chain data from Santiment suggests further price corrections are likely as active addresses remain low â down sharply from recent highs in DOGEâs case â and MVRV (market value to realized value) ratios suggest the three memecoins are overvalued.
On-chain metrics suggest meme coins could continue to fall
Active addresses are an on-chain indicator that identifies the activity of wallets holding tokens, thereby determining changes in demand and interest in the coin in the market.
Dogecoin active addresses hit a six-month high of 133,880 on October 10. Since then, the metric has fallen sharply, according to data from Santiment.
DOGEâs price has not fully reflected the decline in active addresses. While the memecoin lost 1.7% on October 10, it has since gained about 10% and is currently stable at $0.1155 as of Tuesday.
For Shiba Inu and Pepe, the number of active addresses decreased on October 13 and has recovered slightly since then. However, active addresses for SHIB and PEPE remain below the six-month average.
The MVRV (market value to realized value) ratio is used to determine whether a token is undervalued or overvalued over a given period of time. The 30-day MVRV ratios of DOGE, SHIB, and PEPE are 4.93%, 9.47%, and 13.52% respectively, indicating that all three memes are currently overvalued. PEPE is currently the most overvalued meme of the three.
These positive MVRV values ââcan be interpreted as a sell signal, potentially increasing selling pressure on tokens on exchanges. In previous instances when MVRV spiked, there was often a price correction that followed.
Trading volume for the three meme coins has hit a 15-day low, according to data from Santiment. A drop in trading volume is often seen as a sign that traders are losing interest in the coins, or at least a signal that market makers are not paying attention.
Currently, Dogecoin is trading at $0.1155 (+3.1% on the day), Shiba Inu is at $0.00001831 (+2.3%) and PEPE is at $0.00001059 (+2.5%) at the time of writing.
However, it should be noted that the crypto market can fluctuate greatly in just a few minutes due to unexpected factors, especially news related to bitcoin. Therefore, traders should closely monitor their transactions.
