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On-chain data shows Shiba Inu (SHIB) and other memecoins in the sector have observed a sharp boost in their volumes alongside their rallies.
These Memecoins Have Enjoyed 3,000% Average Volume Increase
According to data from the on-chain analytics firm Santiment, the trading volume of the memecoins has shot up recently. The “trading volume” here refers to the total amount of a given cryptocurrency involved in trading activities on the various spot exchanges in the sector.
When the value of this metric is high, it means that the asset in question is observing a large amount of trades right now. Such a trend implies that the interest around the coin is high among the investors.
On the other hand, the low indicator suggests that investors may not pay too much attention to the cryptocurrency as they are not making trades.
Now, here is a chart that shows the trend in the trading volume for four different memecoins: Shiba Inu, Pepe (PEPE), FLOKI (FLOKI), and Bonk (BONK).
Looks like the value of the metric has been quite high for all of these coins recently | Source: Santiment on X
As displayed in the above graph, the Bitcoin trading volume for all four of these memecoins has surged to high levels recently as their prices have gone through a rally.
Santiment notes that, on average, the trading volume across Shiba Inu, FLOKI, Pepe, and Bonk has increased by more than 3,000% over the past week. This would imply that crowd interest in these assets has witnessed a significant uplift.
Generally, it’s not surprising to see the volume jump alongside price surges, as such sharp price action is attractive to investors, so they tend to make more moves in such periods.
For any rally to be sustainable, it must keep attracting fresh volume. This is because moves like these require a large amount of fuel to keep going, which they can only get if more and more interest comes into the asset.
Sometimes rallies start sharp, but fail to amass any appreciable volume, so, predictably die off before too long. As the volume of Shiba Inu and others has rocketed up recently, at least their current rallies shouldn’t face an issue like this.
Now, while the trading volume can be something that can help rallies stretch longer, a high volume itself doesn’t imply a bullish prediction. This is because the volume can also spike during a selloff, as the indicator merely keeps track of the activity and not whether said activity is buying or selling dominated.
As such, all that can be said about the implications of the current high trading volume on the prices of Shiba Inu and the company is that they should likely continue to see high volatility in either direction in the coming days.
Shiba Inu Price
Shiba Inu has enjoyed an extraordinary run of more than 180% in the past week, which has taken its price to the $0.00002746 mark.
The price of the asset appears to have been sharply going up recently | Source: SHIBUSD on TradingView
Featured image from iStock.com, Santiment.net, chart from TradingView.com
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