Dogecoin outperformed Bitcoin and Ethereum as per the liquidity metrics while SHIB beat its counterpart in volume. Despite DOGE’s excellence in market depth and spread, it provides no ground for a meme rally. Although a large part of the crypto community considers memes to have little to no utility, Dogecoin [DOGE] and Shiba Inu [SHIB] […]
have proven to be of service in other areas. One space where these dog-themed cryptocurrencies have continued to excel in is ‘liquidity.’Surprising right? Well, that’s because there is a general misconception about how to weigh the liquidity level of an asset. Generally, investors believe that market capitalization is the best metric to gauge the liquidity of an asset. However, that doesn’t give us a real picture.On 8 December 2022, Conor Ryder, cleared the air on the subject matter via hispage.
Overall, the Kaiko data shared by Ryder placed DOGE above BTC and ETH in the liquidity ranks. This conclusion shows how the market cap alone is not the only estimate of an asset’s working capital. But how did DOGE edge out the crypto kings? While DOGE could not boast of a monumental volume impact, it was in third place per the market depth and spread.
The spread of an asset is determined by calculating the difference between the best bid and best ask in an order book within an interval. Hence, an open wide spread indicates weak liquidity and vice versa. Interestingly, DOGE only lagged behind
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Should Dogecoin buyers wait for a breakout past this psychological level before bidding?Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion. The market structure of Dogecoin was bullish. The lower timeframe analysis showed $0.085-$0.09 to be a support zone. Bitcoin [BTC] continued to trade beneath the $23k mark. While it hasn’t retested the $22.3k support […]
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