In a recent disclosure supported by data analysis and shared by prominent strategist Ali Martinez, there seems to be a positive correlation between the two largest dog-themed tokens, Dogecoin (DOGE) and Shiba Inu (SHIB).
The data derived from the analytics platform IntoTheBlock as of August 10, 2023, signifies a positive correlation coefficient of 0.74 measured for a period of 60 days between DOGE and SHIB.
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According to Ali, this scenario could have a long-lasting impact on the price trajectory of both dog-themed digital assets.
Ali Martinez noted, “Data from Intotheblock shows a strong positive correlation of 0.74 between SHIB and DOGE. This means that when SHIB’s price moves, DOGE often follows in the same direction.”
1/2 Data from @intotheblock shows a strong positive correlation of 0.74 between $SHIB and $DOGE. This means that when #SHIB's price moves, #DOGE often follows in the same direction. pic.twitter.com/pavkJSv79n
— Ali (@ali_charts) August 10, 2023
The correlation coefficient of 0.74 signifies a notable connection between SHIB and DOGE’s price trends. This implies that there is an alignment in their price movements.
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DOGE Set for SHIB-Like Rally?
The significance of the correlation between the assets was put to a test over the past week. According to CoinMarketCap, Shiba Inu (SHIB) saw about a 20% price increase over the last seven days, while Doegecoin (DOGE) managed only 2%.
However, Ali sees this gap as an opportunity for traders to leverage, considering their historically high correlation coefficient. In the same thread of tweets, he said it may end up being a good decision if traders can closely watch Dogecoin traders going forward.
“SHIB has risen by 20% over the past week, but DOGE hasn’t mirrored that move yet. Given their high correlation coefficient, it might be wise to closely watch Dogecoin,” Ali Martinez noted.
It’s worth noting that lots of factors could influence the market. They include investor sentiment, macroeconomic trends, technological advancements, and others. The correlation between DOGE and SHIB noticed through their coefficient mentioned above could have been triggered by a number of reasons, including shared investor interest and a shift in market sentiment.
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