Why Is Shiba Inu Crashing and What's Next for SHIB

Shiba Inu's price crash is a pressing concern for investors, and it's essential to understand the reasons behind it. The SHIB token's value has plummeted due to a significant increase in supply.

The Shiba Inu team's plan to burn 40% of the total SHIB supply has been put on hold, which has led to a surge in new token creation. This has resulted in a substantial increase in the circulating supply of SHIB.

The rise of alternative cryptocurrencies, such as Dogecoin, has also contributed to the decline of Shiba Inu's price. As investors become increasingly interested in other meme coins, the demand for SHIB has decreased.

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Shiba Inu's price decline is a worrying trend that has been ongoing for a while now. The open interest for Shiba Inu has seen a near-constant decline each day since March 6, dropping from its $135 million all-time high to just $80 million by March 18.

This decline translates to an over 40% decrease in the space of two weeks. The price of the meme coin has followed the same trend, dropping from its yearly highs above $0.00004 to $0.000028 at the time of writing. A decrease in open interest is generally bearish for a cryptocurrency, as it shows less money is being invested in SHIB derivative products, thereby decreasing demand.

Historically, a decline in open interest has often coincided with a decline in price. If this trend were to continue, the SHIB price may be headed for a price crash, similar to the one that occurred in 2021 when the price fell more than 50%. The open interest had reached its current all-time high in October 2021, but after peaking, both the open interest and the SHIB price suffered tremendously.

Investors are still holding onto their SHIB tokens, which is a bullish sign for the meme coin. According to data from Santiment, investors have refrained from sending their tokens to exchanges, leading to a significant drop in active SHIB deposits. This means that investors are choosing to hold onto their tokens rather than sell them.

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Market Factors played a significant role in the Shiba Inu's price drop. One major factor was the decline in investor interest, which can be attributed to the lack of significant updates on the project's development.

The Shiba Inu's price was also affected by the overall market sentiment, which shifted towards risk aversion. This was partly due to the global economic uncertainty and the subsequent decrease in investor confidence.

The cryptocurrency market's volatility also contributed to the Shiba Inu's price crash, with the price experiencing significant fluctuations in a short period of time.

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Mainstream exchanges could exacerbate the problem. The growing mainstream attention Shiba Inu is receiving could increase its volatility.

At the time of writing, a petition on change.org has gathered 511,000 signatures requesting Robinhood Markets add support for Shiba Inu. This follows successful appeals to Binance and Coinbase.

The data from Coinbase suggests most new buyers are looking for a quick flip instead of a long-term investment, with the token's typical holding time being just 11 days on the platform.

This is a far cry from Bitcoin and Ethereum, which boast holding times of 76 days and 77 days, respectively.

The Shiba Inu burn rate has taken a significant hit, plummeting by 91.94% in the last 24 hours.

This drastic decline is a stark contrast to the 29.5 million SHIB tokens burned the previous day, highlighting the lack of interest in this metric.

The Shiba Inu burn tracking website, Shibburn, reported only 2.367 million SHIB tokens burned in the last day, a far cry from the 20.2 million tokens burned on May 13.

The burn rate is also reflected in the number of burn transactions recorded in the 24-hour period, with only four transactions recorded, the largest carrying around 1.5 million SHIB.

The last burn transaction was recorded 16 hours ago, as of the time of writing.

The decline in the daily burn rate has also impacted the weekly burn rate, which saw a 3.59% increase from the prior week, a meager increase considering the previous week's figures.

The weekly burn rate of 143.35 million tokens is a significant drop from the previous week's figures, and may be a sign of a larger trend in the market.

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Shiba Inu's riskiness can be attributed to its poor fundamentals, which is a major concern for investors. The token's volatility makes it unsuitable as a store of value or medium of exchange.

The Shiba Inu token was created to ride the wave of popularity from meme coins like Dogecoin, but it doesn't introduce any innovative use of blockchain technology. This lack of innovation is a significant drawback.

Investors who hold onto Shiba Inu may find themselves holding the bag when the market corrects, as the token's volatility is far too great to function well in the long term.

Shiba Inu is a risky investment due to its poor fundamentals. The token was designed to ride the popularity of meme coins and hype surrounding Elon Musk's adoption of a Shiba Inu breed puppy, but it doesn't introduce any innovative new use of blockchain technology.

Shiba Inu's volatility makes it far too unstable to function well as a store of value or medium of exchange. This volatility has already led to a significant price drop, with the price of SHIB dropping over 50% in the past.

Investors should be aware of the risks associated with holding Shiba Inu, as the token's price may continue to decline if the trend of falling open interest continues. The open interest has already reached its current all-time high, similar to the peak in 2021.

One of the main concerns with Shiba Inu is the dominance of whales in the ecosystem. A single trader has invested $8,000 into $SHIB and grown it to a colossal $5.7 billion. This highlights the issue of whale dominance and the potential for large-scale exits to impact the market.

Shib holders are still investing in the meme coin, and data from Santiment shows that active SHIB deposits have dropped significantly. This decline in deposits is a sign that investors are holding onto their tokens rather than sending them to exchanges.

Investors are choosing to hold onto their SHIB tokens, which means they're not looking to sell. This is a bullish trend for the coin.

A decline in selling rate is often a sign that investors are confident in their investment and are willing to hold on to their tokens. This confidence is a good indicator of the coin's potential for growth.

The crypto market's recovery will be crucial in determining the future of SHIB. If the market recovers, SHIB may be poised to rally from here.