Here are 3 Reasons Why Shiba Inu Prices and Volumes Are Soaring

Author: Amy Liu

Author: Amy Liu

Image source: Bitui Terminal, CoinGecko, Twitter, Bybt

According to the comparison terminal data, since the low point of $0.0000069 on October 1, the price of "Dogecoin Killer" Shiba Inu (SHIB) has risen by 914%, reaching a new record high today, reaching $0.00008519, 24-hour transaction Volume soared 137% to $24.67 billion.

Data from the CoinGecko platform shows that the market value of SHIB has surpassed Robinhood, a stock and encryption trading platform, reaching US$36.9 billion, while Robinhood (HOOD) has a market value of US$30 billion, and European banking giants Societe Generale and Deutsche Bank have a market value of US$28 billion, $26 billion. SHIB became the ninth-largest cryptocurrency on CoinGecko, overtaking arch-rival Dogecoin, with a nearly 40-fold year-to-date gain.

Like the birth of Dogecoin, the creation of SHIB was a joke in itself, and the current supply of tokens is in the hundreds of trillions, so the price per token is relatively low.

SHIB keeps hitting new all-time highs, what is the real reason behind it?

Three reasons for the surge in Shiba Inu price and trading volume include: listing on multiple exchanges, launching its own Shiboshi NFT series, and SHIB’s surge in open interest on derivatives exchanges.

One of the biggest factors helping SHIB’s price rise over the past month has been increased user exposure to the token, thanks to its listing on multiple cryptocurrency exchanges.

The second reason is that Shiba Inu has launched its own line of NFTs called Shiboshi's. All Shiboshi are now minted and listed on the OpenSea NFT marketplace.

The third reason for SHIB’s strength is the surge in futures open interest (OI) across several exchanges such as OKEx, FTX, and Huobi.

As the above chart shows, SHIB’s OI surged from $15.7 million on October 3 to a record high of $178.95 million on October 27 as the price of SHIB surged to a new all-time high.

According to market analyst Marcel Pechman, "open interest appears to be following the price increase rather than actually increasing."

It's worth noting that while sellers liquidate their positions during a bull market, which is usually expected, this has not happened during the recent rally, meaning traders are either doubling down on shorts by adding margin, Either those market makers are fully hedged and don't care about the price.

Pechman said, “Longs are so profitable, so it’s easier for them to keep buying spot and push prices higher. There don’t seem to be ‘true’ short sellers, only market makers. If there’s a huge liquidation, open interest will shrink.”

There is a new force behind SHIB's recent price surge.

Blockchain data shows that while SHIB continues to attract retail investors around the world, more sophisticated cryptocurrency traders are driving the latest rally.

Addresses labeled as “smart money” by blockchain data firm Nansen have started buying SHIB since the start of the week, said Nansen research analyst Daniel Khoo. The purchases were mainly concentrated in the past 7 days, with an amount of about 160 million US dollars.

Addresses tagged as “smart money” include traders who have made more than $100,000 in profits by providing and mining liquidity in decentralized finance (DeFi) protocols and public entities investing in cryptocurrencies, as well as investing in Public entities of cryptocurrencies.

“It blew me away,” Khoo said, adding that he didn’t expect SHIB to be built up on “smart money.”

Since early October, SHIB transactions worth at least $1 million have started to pick up, according to Santiment. Whale activity has spiked on multiple days over the past few weeks as the price of SHIB has risen.

According to CoinGecko, on centralized exchanges, SHIB’s trading volume mainly comes from Binance, Coinbase, and BKEX.

Google Trends also revealed another interesting fact about Shiba Inu: Despite China’s cryptocurrency trading ban, its traders have shown unquenchable interest in SHIB, almost as high as their American counterparts.

Coinbase, the largest cryptocurrency exchange in the United States, is currently experiencing downtime. As of press time, the website has been offline for more than 15 minutes, and the website status page shows that it has encountered "connection problems." Industry analysts speculate that the downtime is related to the boom in SHIB transactions. On the Coinbase platform alone, the transaction volume of SHIB has exceeded US$5 billion.

This article is from Bitpush.News, reproduced with authorization.