Shiba Inu price lags behind despite massive spike in Shibarium transactions and SHIB token burn
- Shiba Inu price yielded 3.42% losses over the past week, SHIB struggles to recover despite increasing activity on Shibarium.
- The Layer 2 chain hit a key milestone, crossing 1.5 million in transactions.
- SHIB burn rate increased nearly 80% overnight, acting as a catalyst for Shiba Inu’s rising social dominance.
Shiba Inu price is struggling to wipe out its losses from the past week. SHIB price declined 3.42% in the past seven days. The meme coin’s Layer 2 chain Shibarium noted a spike in activity, however the development failed to act as a catalyst for SHIB price.
Also read: PEPE price recovery fazed by split in the meme coin’s team and Telegram account hack
Shiba Inu scaling solution hit new milestone
Shibarium’s transaction volume exceeded 1.5 million, marking a milestone in the Layer 2 chain’s user activity, based on data from Shibariumscan. The scaling solution is key to SHIB ecosystem token holders, for bridging Ethereum, BONE, and other tokens to Shiba Inu’s Layer 2 chain.
Despite the rising transaction activity on Shiba Inu’s scaling solution, the update failed to fuel a recovery in SHIB price. The burn rate of SHIB tokens picked up pace with nearly 80% increase overnight, 61.96 million Shiba Inu tokens were burned, early on Saturday.
Burning tokens removes them from circulation, effectively reducing the supply of SHIB across exchanges and in turn reducing the selling pressure on the meme coin. Therefore, it holds significance as a catalyst, alongside other metrics.
SHIB’s social dominance, an indicator that measures the mentions of Shiba Inu across social media platforms, is on the rise. Social dominance started rising on September 7, as seen in the chart from crypto intelligence tracker Santiment.
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SHIB social dominance vs SHIB price
The rise in social dominance is typically followed by a SHIB price recovery, as seen on August 5, August 12, August 29. The spike in social dominance is followed by a peak in SHIB price. At the time of writing, SHIB price is in an upward trend that started after August 17. SHIB is exchanging hands at $0.00000760 on Binance. Despite the developments in SHIB, the meme coin’s price is yet to erase losses from the past week.
Bitcoin, altcoins, stablecoins FAQs
What is Bitcoin?
Bitcoin is the largest cryptocurrency by market capitalization, a virtual currency designed to serve as money. This form of payment cannot be controlled by any one person, group, or entity, which eliminates the need for third-party participation during financial transactions.
What are altcoins?
Altcoins are any cryptocurrency apart from Bitcoin, but some also regard Ethereum as a non-altcoin because it is from these two cryptocurrencies that forking happens. If this is true, then Litecoin is the first altcoin, forked from the Bitcoin protocol and, therefore, an “improved” version of it.
What are stablecoins?
Stablecoins are cryptocurrencies designed to have a stable price, with their value backed by a reserve of the asset it represents. To achieve this, the value of any one stablecoin is pegged to a commodity or financial instrument, such as the US Dollar (USD), with its supply regulated by an algorithm or demand. The main goal of stablecoins is to provide an on/off-ramp for investors willing to trade and invest in cryptocurrencies. Stablecoins also allow investors to store value since cryptocurrencies, in general, are subject to volatility.
What is Bitcoin Dominance?
Bitcoin dominance is the ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies combined. It provides a clear picture of Bitcoin’s interest among investors. A high BTC dominance typically happens before and during a bull run, in which investors resort to investing in relatively stable and high market capitalization cryptocurrency like Bitcoin. A drop in BTC dominance usually means that investors are moving their capital and/or profits to altcoins in a quest for higher returns, which usually triggers an explosion of altcoin rallies.
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Author
Ekta Mourya
FXStreet
Ekta Mourya has extensive experience in fundamental and on-chain analysis, particularly focused on impact of macroeconomics and central bank policies on cryptocurrencies.
