Dogecoin (DOGE) and Shiba Inu (SHIB) prices continued their decline on Wednesday, falling by up to 10% after a 9% drop the previous day. Both cryptocurrencies broke below their key support levels as traders booked profits, leading to an increase in selling pressure.
According to data from on-chain provider Santiment, there was a significant rise in the Network Realized Profit/Loss (NPL) metric, which tracks the Return on Investment (ROI) based on on-chain transaction volume. This spike in NPL indicates that traders are cashing out, adding to the bearish sentiment surrounding both DOGE and SHIB.
Santiment’s Network Realized Profit/Loss (NPL) data showed massive spikes for both Dogecoin and Shiba Inu, signaling that holders are realizing profits at an accelerated rate. The NPL metric rose sharply for DOGE, moving from 36.01 million on Monday to 133.68 million on Tuesday. Similarly, SHIB’s NPL surged from 1.18 million to 426.17 million in the same timeframe. These increases reflect a strong desire to cash out profits, adding selling pressure that could weigh on the prices of both tokens.
Strong increases in the NPL metric suggest that traders are actively liquidating their positions at profits, which could signal a potential continuation of the downward trend for these memecoins.
Dogecoin faced significant rejection from the 61.8% Fibonacci retracement level drawn from the December 8 high of $0.48 to the December 20 low of $0.26 at the $0.40 mark. The price declined by 10.27% on Tuesday, and as of Wednesday, DOGE is hovering around $0.35.
If DOGE continues to struggle and faces further rejection, it could experience an additional 13% decline, with the next major support level positioned at $0.30. The Relative Strength Index (RSI) on DOGE’s daily chart is currently at 48, just below the neutral 50 mark, and it is pointing downward, signaling bearish momentum.
Shiba Inu's price also faced rejection from its own 61.8% Fibonacci retracement level, drawn from the August 5 low of $0.000010 to the December 8 high of $0.000033. This level at $0.000024 saw a 10.73% decline until Tuesday, and SHIB continues to edge lower around $0.000021 on Wednesday.
If the correction persists, SHIB could see an additional 11% decline to test its next support level at $0.000019. The RSI for SHIB on its daily chart stands at 41, also below the neutral level of 50 and pointing downward, suggesting that the bearish momentum remains strong.
With both Dogecoin and Shiba Inu showing signs of weakness and increasing profit-taking, traders are closely watching their price movements. The RSI and the NPL data point to a continuation of the downturn, suggesting further declines could be in store for both memecoins. Investors should be prepared for potential challenges as these tokens face increasing selling pressure and bearish momentum in the short term.
