Investors Continue to Flock to Shiba Inu (SHIB) as Bitcoin Traders Exercise Caution
Investors are once again showing their enthusiasm for meme-focused cryptocurrency Shiba Inu (SHIB), raising concerns among bitcoin traders. The open interest in Binance’s SHIB futures has more than doubled to $101.65 million this month, reaching the highest level since February 5, according to Coinglass, a trusted data source. The SHIB futures are designed with a contract size of 1000 SHIB each, offering leverage of up to 25 times.
Driven by optimism surrounding an imminent layer 2 launch, SHIB’s market value has surged by nearly 32% to $6.58 billion, leading some to speculate that it may shed its meme coin designation. The increasing open interest, combined with the rise in market capitalization, indicates an influx of new capital into the SHIB market. Historically, this scenario has often preceded weakness in bitcoin, the dominant cryptocurrency by market value.
SHIB has managed to surpass the $100 million open interest threshold at least seven times since its introduction. Interestingly, the six previous spikes coincided with local bitcoin price peaks. This pattern aligns with the trend observed in traditional markets, where substantial gains in meme stocks compared to defensive plays are considered a contrary indicator for the broader market. CoinDesk data reveals that bitcoin has remained rather stagnant near the $30,000 mark this month amid the SHIB rally.
It is important to note that past performance does not guarantee future results, and some analysts anticipate a resumption of the uptrend in bitcoin. While investors are cautioned to exercise prudence, it remains to be seen how the SHIB market will impact the overall cryptocurrency landscape in the coming weeks.