On-chain data shows that Shiba Inu (SHIB) and other memecoins in the sector have seen a sharp increase in their volumes alongside their rallies.
These Memecoins have seen an average volume increase of 3,000%
This is evident from data from the on-chain analysis company Santimentthe trading volume of memecoins has increased enormously recently. The ‘trading volume’ here refers to the total amount of a particular cryptocurrency involved in trading activities on the various spot exchanges in the industry.
When the value of this metric is high, it means that the asset in question is currently seeing a large number of transactions. Such a trend implies that interest in the coin is high among investors.
On the other hand, the low indicator suggests that investors may not be paying too much attention to the cryptocurrency as they are not transacting.
Here is a chart showing the trend in 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 shown in the chart above, Bitcoin trading volume for all four of these memecoins has recently surged to high levels as their prices have rallied.
Santiment notes that trading volume of Shiba Inu, FLOKI, Pepe and Bonk has increased by more than 3,000% on average over the past week. This would imply that public interest in these assets has increased significantly.
In general, it is not surprising that volume rises along with price increases, as such sharp price actions are attractive to investors, so they tend to make more moves during such periods.
For any rally to be sustainable, it must continue to attract new volume. This is because such moves require a large amount of fuel to continue, which they can only get if more and more interest accrues on the asset.
Sometimes rallies start sharply but fail to gather any significant volume, so they predictably fade away quickly. Since the volume of Shiba Inu and others has skyrocketed recently, their current rallies should at least not face a problem like this.
While trading volume can be something that can make rallies last longer, high volume in itself does not imply a bullish forecast. This is because volume can also increase during a sell-off as the indicator only tracks activity and not whether buying or selling activity is dominated.
The only thing that can be said about the impact of the current high trading volume on Shiba Inu and company prices is that they are likely to continue to see high volatility in both directions in the coming days.
Shiba Inu Award
Shiba Inu has made an extraordinary run of over 180% in the past week, pushing 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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