Shiba Inu price likely to recover with bullish on-chain metrics and Shibarium scaling efforts
- Shiba Inu developers led by Shytoshi Kusama continued their efforts to scale Shibarium, marking significant progress.
- Shibarium, the Layer 2 scaling solution, has been scaled 1,500%, according to the Alchemy team.
- Total number of SHIB holders recovered over the weekend, active deposits to exchanges declined with ongoing Shibarium scaling efforts.
Shibarium’s launch on August 17 did not go as expected. User funds, approximately 1,000 Ethereum and 600,000 BONE tokens were “paused” on the Layer 2 blockchain. Over the weekend, however, there was a recovery in the total number of holders of Shiba Inu tokens.
In a recent blog, Shytoshi Kusama explains Shibarium has scaled 1,500%, according to data from web3 development platform Alchemy.
Shiba Inu’s Shibarium scaling efforts are underway
Shiba Inu ecosystem’s Layer 2 scaling solution Shibarium is being scaled consistently. In a blog post, Kusama explains that a benchmark has been set for the traffic that can be expected. The developers of the project consulted with blockchain experts to create additional protocols to support and manage traffic to the Layer 2 chain.
Once Shibarium is live again, the funds paused on the bridge will likely be accessible by users. If the funds are lost, Kusama’s $2 million insurance announcement is set to make investors whole.
Shiba Inu on-chain metrics support SHIB recovery
The total amount of SHIB holders, represented by the red line, climbed consistently from June 2023 to the time of writing. Interestingly, the supply on exchanges has declined, signaling a reduction in selling pressure on the asset.
Active SHIB deposits to exchanges have declined since August 19, showcasing that holders are being careful, awaiting a SHIB price recovery and the recovery of funds paused on the Shibarium mainnet bridge.
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Shiba Inu on-chain metrics
Metrics like social dominance and social volume, used to ascertain the relevance of the meme coin among holders, are largely neutral. A recovery in social dominance this week is likely to act as a catalyst for a SHIB price rally.
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.
