On-chain indicators reveal a concerning trend, especially for Shiba Inu, which has witnessed a consistent decline in Open Interest since March.
However, Shiba Inu’s surge in burn rate, resulting in the destruction of millions of SHIB tokens, has garnered significant attention and sparked optimism.
In the last 24 hours, meme coins have registered a strong rally with the dogecoin (DOGE) price rallying by 19%, and Shiba Inu (SHIB) surging by 13%. However, let’s look at the on-chain derivatives for both these meme coins to see whether this surge can continue further or this is just a dead-cate-bounce.
Since the onset of March, Shiba Inu has witnessed a consistent decline in Open Interest, indicating waning interest among traders. Concurrently, its price has undergone a retracement phase, suggesting a lack of conviction from bullish investors.
While short-term rebounds led to notable spikes in Open Interest, these were swiftly reversed, signaling an increasing number of market participants opting to remain on the sidelines. In contrast, Dogecoin’s trajectory differed.
Although Dogecoin also experienced a drop in Open Interest, the majority occurred in the latter half of April. Notably, its price rebounded more significantly towards late March, marking an 86% increase compared to Shiba Inu’s 39%. This disparity in price action elucidated the variance in Open Interest and thus, market sentiment.
In summary, both meme coins are encountering considerable selling pressure, reflecting a prevailing bearish sentiment. However, Shiba Inu has exhibited weakness over a prolonged period compared to Dogecoin.
Courtesy: Santiment
DOGE and SHIB Price Bounce Backs
In conclusion, both meme coins exhibited relatively healthy 365-day MVRV ratios, standing at 25.58% for Dogecoin and 28.84% for Shiba Inu. Despite recent setbacks, holders remained in a profitable position, suggesting resilience amidst market fluctuations.
However, the potential for recovery for both DOGE and SHIB comes on the backdrop of a strong recovery in Bitcoin and the broader cryptocurrency market. On the other hand, Shiba Inu has also registered a strong surge in the SHIB burn rate.
According to data from the Shibburn tracker, there has been an astounding 1009% increase in the burn rate of Shiba Inu (SHIB) over the past 24 hours, resulting in the destruction of 29.11 million SHIB tokens. This remarkable surge in the burn rate, intended to improve SHIB’s tokenomics, has led to a reduction in the cryptocurrency’s circulating supply.
Despite the substantial increase in the SHIB burn rate, the price trajectory has maintained its upward trend, aligning with broader market movements. Notably, with the surge in burn rate, SHIB has once again surpassed the $0.000025 mark, a psychologically significant level for the token. This development has sparked considerable interest among investors in Shiba Inu, with many speculating optimistically about the coin’s future price movements.
