Despite a sharp drop in Dogecoin (DOGE) and Shiba Inu (SHIB) prices in recent days, these projects are still showing signs of strength. This is evident from data from the institutional crypto exchange FalconX.
Both coins recorded high trading volumes while their prices fell, suggesting that the projects’ liquidity has remained intact.
Memecoin prices are falling sharply
In recent days, the price of Dogecoin (DOGE) fell from $0.20 to a local low of almost $0.14, representing a drop of around 30%. Since then, the price of this prominent memecoin has shown some recovery and has risen to a current level of $0.155.
A similar pattern has been observed in Shiba Inu (SHIB); this altcoin was trading around $0.000029 a week ago, but subsequently fell below $0.000020, a drop of 32%. SHIB is also showing signs of recovery, with a small recovery to a current value of $0.000022.
Trading volume remains high
Although memecoin prices have recently experienced a sharp decline, trading volume in the memecoin market remains relatively high. In March, the daily trading volume of the entire memecoin market reached almost $6 billion. During the recent crash, this volume dropped to $3 billion.
Despite this halving in volume, it is still significantly higher compared to January when the memecoin market experienced a trading volume of only $500 million.
Liquidity important for memecoin market
Liquidity is a crucial aspect of stocks and cryptocurrencies. Low liquidity can pose a major risk, as even limited sales volume can cause the price to drop significantly. In contrast, high trading volume indicates strong demand and is seen as a sign of a mature cryptocurrency. This view is also shared by the exchange FalconX:
“In summary, even if short-term price and volume trends indicate a tired market, the depth of the market shows that memecoins may have more staying power than some expect,” FalconX said.
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Source: https://newsbit.nl/dogecoin-en-shiba-inu-tonen-veerkracht-door-sterke-liquiditeit/
