Shiba Inu (SHIB) Experiences Significant Netflow Surge Amid WazirX Exploit Fallout
Shiba Inu (SHIB) has recently witnessed a dramatic shift in large holder net flows, as revealed by data from IntoTheBlock. The metric, which tracks the activity of crypto whales, surged by an astonishing 8,530.25% over the past seven days. However, this surge indicates a substantial negative netflow, suggesting significant selling activity among large SHIB holders.
The surge in negative netflows is largely attributed to the recent exploit of the Indian crypto exchange WazirX. The breach compromised one of WazirX’s multisig wallets, resulting in over $230 million in user asset withdrawals, including 5.4 trillion SHIB tokens worth approximately $100 million. These tokens were subsequently sold off by the exploiter, leading to the observed netflow anomaly.
SHIB Price Fluctuations and Key Barriers
Following the WazirX incident, SHIB’s price showed resilience, rebounding for three consecutive days before experiencing a decline. As of now, SHIB is trading at $0.0000175, down 2.2% in the last 24 hours, reflecting a broader market downturn. The current price places SHIB near a crucial barrier; data from IntoTheBlock indicates that around 434.97 trillion SHIB were acquired by 37,560 addresses in the $0.000017 to $0.000019 range, with an average price of $0.000018. Breaking through this resistance could potentially trigger increased buying activity and drive the price higher.
Shiba Inu Market Performance and Future Prospects
Despite the challenges, SHIB remains the second-largest meme coin by market capitalization. Over the past week, its price has dropped by 9%, according to CoinGecko. However, several factors could herald a resurgence:
- Burn Rate Increase: The Shiba Inu team’s burn mechanism, introduced in 2022 to reduce the circulating supply, has seen a substantial uptick. In the last 24 hours alone, approximately 60 million SHIB tokens were burned, a 500% increase from July 22. With more than 41% of the initial supply already destroyed, the burn rate’s escalation could eventually support higher prices by creating scarcity.
- Exchange Netflow Trends: SHIB’s exchange netflows have shown significant outflows over inflows in the past 30 days, indicating a shift towards self-custody. Historically, such trends have been bullish, as they reduce immediate selling pressure. A similar pattern was noted in March, preceding a substantial price rally.
- Rising Open Interest: Last week, SHIB’s open interest in derivative contracts exceeded $30 million, marking a one-month high. Increased open interest often preludes heightened market activity and potential price volatility.
- Shibarium’s Progress: The layer-2 scaling solution Shibarium continues to evolve, processing over 400 million transactions and generating more than 5.5 million blocks since its launch. By lowering transaction costs and enhancing scalability, Shibarium aims to bolster the Shiba Inu ecosystem, potentially aiding SHIB’s price stability and growth.
Current Market Dynamics
Shiba Inu has entered a consolidation phase, with whale activity dropping by 60% and Shibarium showing mixed performance. However, the SHIB burn rate has surged by over 500%, leading to significant token destruction. Despite these fluctuations, SHIB’s price has seen modest daily gains, currently trading at approximately $0.00001787. This coincides with a notable decrease in daily transaction volume exceeding $100,000, reflecting reduced market activity.
Community Efforts and Future Outlook
The SHIB community continues to advocate for burning mechanisms to enhance token value through scarcity. A recent petition urging Binance to burn 1% of all Shiba Inu trade fees has garnered substantial support, highlighting community-driven efforts to influence market dynamics.
In summary, while Shiba Inu faces short-term challenges, the combination of increasing burn rates, shifting exchange netflows, rising open interest, and ongoing developments in Shibarium could set the stage for a potential resurgence. Analysts and enthusiasts remain optimistic, forecasting significant upward movements if these trends continue. As the market closely watches SHIB’s trajectory, the coming days could be pivotal in determining its next major move.
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