In the fast-paced world of crypto, where trends come and go like the tides, one memecoin has managed to capture the attention of enthusiasts and skeptics alike: Shiba Inu. However, investor sentiment has deteriorated massively in recent months, as the price of the SHIB token has been in a descending trend channel since the beginning of February.
But there is new hope: since mid-May, there have been some positive trends for Shiba Inu: the network is growing strongly, and there is also a dwindling supply on the exchanges.
On-chain analysis firm Santiment has shed light on the remarkable surge in new daily addresses created for Shiba Inu, surpassing a staggering 2,500 per day (on average) over the past couple of weeks. This surge in activity has propelled SHIB into the spotlight, making it one of the tokens accounting for the highest transaction fees.
What Does It Mean For Shiba Inu?
A closer look at the underlying trends reveals a positive spin to this development. Firstly, the network growth of SHIB has skyrocketed, marking a significant sentiment shift in late May. Previously, the network saw less than 1,000 new addresses created per day, but this has since changed. In June, the network activity surged to over 3,000 addresses per day, with some days even reaching above 4,000. This exponential growth signals a heightened interest in Shiba Inu and its potential.
Furthermore, the Network Realized Profit Loss (NRPL) metric for Shiba Inu indicates a notable decrease in selling pressure. NRPL calculates the average profit or loss of all coins that change addresses daily. It considers the acquisition price of each coin when it was last moved and assumes it was sold when it changes addresses again. The metric’s current status reveals that there is not much selling pressure left, suggesting a potential shift towards a bullish sentiment.
Additionally, Shiba Inu’s supply on exchanges has reached its lowest point since 2022. In mid-June, the supply on exchanges spiked above 9% (of the total supply), but it has now dropped to 8.67%. This steady dwindling supply showcases a scarcity of SHIB on exchanges, which could potentially lead to a rise in its value.
However, amidst the excitement, it’s crucial to consider two distinct perspectives, as Santiment notes. On one hand, the sudden attention on memecoins, including Shiba Inu, can be interpreted as a toppish indicator, possibly signaling a market top or peak. The surge in interest could be seen as a sign of market saturation or even a future decline.
On the other hand, the newfound interest in Shiba Inu could breathe new life into the SHIB token. Before this surge, daily active addresses for SHIB were lackluster, indicating a lack of demand. The recent surge in interest has awakened a dormant enthusiasm for the token, as indicated by Santiment’s proprietary metrics. The firm concludes:
We at Sanitment believe it’s crucial to peel back the layers of market activity to show the foundational data. These data points, which may not be immediately visible, offer a more comprehensive understanding of the dynamics in play.
SHIB Price On The Verge Of A Breakout?
At press time, SHIB was trading at $0.00000758 and was on the verge of a potential breakout from the downtrend channel that has been in place since early February. A significant push above $0.000008 towards the 38.2% Fibonacci retracement level ($0.00000831) is needed to avoid a fakeout.
Featured image from iStock, chart from TradingView.com