A token inspired by the Shiba Inu breed may be about to sell off after days of outperforming the entire crypto market.
Twitter, the social media app owned by Elon Musk, swapped its famous blue bird icon for Dogecoin mascot Shiba Inu on Monday. The price of DOGE rose almost immediately and its futures market hit records as someone used this memecoin for the Twitter platform.
DOGE 4-hour price chart | Source: Tradingview
Correspondingly, several other Shiba Inu-themed meme coins also rose, with the sector up an average of 14%. Large-cap tokens like SHIB are up 10%, while small-cap tokens like Floki (FLOKI), Kishu Inu (KISHU) and Baby Dogecoin (BABYDOGE) are up 25%.
Memecoins on newer blockchains also have their moments to shine. Some dog-themed zkDoges and zkShibs on the zkSync blockchain (launched in March) have yielded up to 100%.
However, the upward move is unlikely to last for long, with some traders warning that such moves are not indicative of a broader trend.
Guilhem Chaumont, CEO of crypto trading firm Flowdesk, said in a Telegram message:
“We don’t think it’s a sign of a long-term bull market. Quite the opposite.
The crypto market has a regular pattern of uptrends, starting with a Bitcoin bull run, followed by a big altcoin pump, and finally small cap coins.
As BTC is in a relatively steady uptrend, a rising memecoin would indicate phase three, the end of the cycle. But there is no need to speculate excessively on such short-lived price changes. “
Bonnie Cheung, head of strategy at cryptocurrency developer Sending Labs, echoed the sentiment and stated:
“The perception of memecoins is not new and this may taper off from its usual growth over the next few days.”
Long-term growth is still possible for these tokens if the underlying functionality is solidified in the coming months.
“For example, Shiba Inu has become more attractive by launching Shibarium, a layer 2 protocol built on top of Ethereum. Dogecoin is endorsed by Twitter, and the payments space is evolving, and in the long run, These trends could lead to more sustainable growth,” Cheung noted.
The testnet for Shiba Inu’s upcoming Shibarium was quickly accepted. On the other hand, projects like Floki are actively developing games and DeFi tools to move away from “memecoin” tokens — at least as far as developers are concerned.
Meanwhile, some believe Twitter’s move could pave the way for mainstream adoption of cryptocurrencies.
“Musk’s supportive tweets and recent decision to add the Dogecoin logo to Twitter have put DOGE and SHIB in the spotlight. Whether people support memecoin or not, there’s no denying that Musk is pushing mainstream crypto Currency adoption, and getting media attention that shouldn’t be there. It’s definitely a positive outcome for the entire crypto space,” Kadan, CTO of the Komodo blockchain network, said in an email.
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According to Coindesk