TL;DR
- Shiba Inu (SHIB) has increased by 14% in the past week, with bullish indicators suggesting the rally could continue.
- However, signs like declining network growth and reduced whale activity indicate a possible correction ahead.
The Positive Signs
Shiba Inu (SHIB) overcame the price collapse registered at the start of the month, seeing its valuation rise by 14% in the past week. Currently, it trades at around $0.000015 with a market capitalization of almost $9 million, making it the 16th biggest cryptocurrency.
According to IntoTheBlock, two elements hint that the rally might continue in the near future. One of those is the concentration metric, which shows the accumulation or reduction of large holders’ positions. It is up 0.15%, which is interpreted as a bullish sign.
The “In the Money” indicator is next on the list. It shows the change in the number of SHIB investors currently sitting on paper profits. The metric is up almost 4% in the past day as the total share of HODLers in the green spiked to 48%. 3% of the investors would break even should they decide to cash out their stash, whereas 49% remain underwater.
The Bearish Signals
On the other hand, there are some signs indicating that the meme coin might be headed for a correction. Net Network Growth, a momentum signal “that gives a pulse of the true growth of the token’s underlying network,” is down 0.22%.
The number of large transactions, which gauges the whale interest and activity, is also on bearish territory, dropping by 0.34%.
Another factor that might be seen as bad news for bulls is the decreasing rate of Shiba Inu’s burning mechanism. Around 1.6 million tokens were sent to a null address in the past 24 hours, representing a 97% decline compared to the figure observed the day before.
The ultimate goal of the burning program is to reduce the circulating supply of SHIB, making it scarcer and more valuable in time (assuming demand stays the same or rises).
Not long ago, Shibarium (Shiba Inu’s layer-2 scaling solution) adopted a similar mechanism called “Burn Portal,” with BONE tokens playing an essential role in the process. For more updates on the ecosystem, make sure to check out our Shibarium news.
