SHIB and DOGE, two of the most popular memecoins are depicting signs of undervaluation. New research led by the data analytics platform Santiment showed that the coins realized capitalization is far below the market cap.
Shiba Inu and Dogecoin weren’t the only major cryptocurrencies to exhibit undervaluation. XRP, Cardano [ADA], Polygon’s MATIC UNI, and LINK were included in the lot as well.
Based on an analysis of realized capitalizations throughout the short, medium, and long terms, Santiment suggested that these cryptos would gain traction in the forthcoming summer months.
In terms of SHIB, its price fell from 46% from February’s high, and Shiba Inu investors continue to find themselves grappling with a downturn in the token’s price last week.
Experts predict that the “Dogecoin killer” will most likely continue to be mired in a downturn that has persisted since April 16 and will likely conclude the week in the red for the sixth time in the previous seven.
Shiba Inu and DOGE Recent Downturn
Lack of roadmap advancement is one of the factors that has contributed to SHIB’s decline. The “Shibarium” — Shiba Inu’s Layer-2 scaling solution for the Ethereum blockchain — has been under development for a while, but the investment community is now weary of the ongoing delays.
Additionally, SHIB has also been impacted by the the broader market which is currently engulfed in a bearish mood, along with major price declines by cryptocurrencies such as Bitcoin [BTC] and Ethereum [ETH].
The OG memecoin Dogecoin, whose price finished May 2023 10% in the red, is on the other end of the spectrum. Despite an increase in daily transactions driven by DRC-20 Ordinals, the price of DOGE has kept falling.
The graph below shows the 8,200% increase in network activity from 19,240 transactions on May 1 to 1.45 million transactions on May 31. The price however, decreased by roughly 10% throughout this time.
If we examine historical patterns, the price increased whenever there was a persistent increase in transactional activity. But the current divergence between the value and Transaction Count raises a few concerns.
Recently, Dogecoin grabbed headlines after its biggest proponent Elon Musk and a tech billionaire, has been charged with insider trading in a proposed class action lawsuit by investors.
According to suit Musk engaged in “publicity stunts” using Twitter, hiring online influencers, to trade advantageously at their cost using many Dogecoin wallets that he or Tesla controls.
Musk’s attorneys have not yet responded to the latest lawsuit.