Shiba Inu rallies 30% since August low as on-chain data points to further gains ahead
- Shiba Inu extends gains by 30% since the August 5 low, and trades at $0.00001415.
- Shibarium Layer 2 chain invites developers to build in the ecosystem, introducing a comprehensive set of tools.
- Shiba Inu traders realized nearly $14 million in losses on Thursday, a likely sign of capitulation.
Shiba Inu (SHIB), the second-largest meme coin by market capitalization, has observed a large spike in traders realizing losses on Thursday, on-chain data shows, even as SHIB has rallied 30% since the August 5 low of $0.00001078. This capitulation event could be a sign of the formation of a local price bottom, increasing the chances of a further price rebound.
Meanwhile, the meme coin team announced on Wednesday that it has launched a toolkit for developers to facilitate building on Shibarium, Shiba Inu’s Layer 2 chain.
Shibarium invites developers with toolkit and devportal launch
Shiba Inu’s Layer 2 chain launched a portal for developers to build in the ecosystem. Lucie, a marketing executive at SHIB, announced the toolkit and program for developers to build on Shibarium.
Ready to build on Shibarium? #ShibDev offers a complete suite of tools and resources to streamline your development process on Shibarium, the Shib ecosystem's Layer 2 blockchain. Our platform includes essential features such as API management, node access, on-chain data,… https://t.co/8CAob2QOpY
— (@LucieSHIB) August 28, 2024
Shiba Inu on-chain metrics highlight potential for gains
Shiba Inu holders realized losses on their holdings on Thursday, according to Santiment data, which shows that SHIB traders have taken $13.42 million in losses after shedding their SHIB tokens. Since August 1, SHIB traders have realized $54.61 million in losses, as seen in the chart below.
When a large volume of SHIB tokens are sold at a loss, it is a sign of capitulation from investors. such episodes tend to be followed by a recovery in the asset’s price.
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Shiba Inu NPL
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Shiba Inu MVRV ratio (7-day) and (30-day)
SHIB gains 30% since August low
Shiba Inu (SHIB) trades at $0.00001415 at the time of writing. SHIB has gained 30.54% since the August 5 low of $0.00001078, erasing losses from the crypto bloodbath from early August.
The Moving Average Convergence Divergence (MACD), a momentum indicator, shows green histogram bars above the neutral line. This suggests there is underlying positive momentum in SHIB’s price trend. However, traders still need to watch any changes in the indicator for signs of reversal in the trend.
If the MACD line crosses under the signal line, it could imply negative underlying momentum is emerging, prompting a a price correction.
SHIB/USDT daily chart
In case of a downturn, Shiba Inu could sweep liquidity at $0.00001285, a key support level for the meme coin throughout August.
Bitcoin, altcoins, stablecoins FAQs
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.
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.
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.
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.
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.
