Bitcoin’s parabolic rally to its all-time high of $69,000 has awakened the rest of the cryptocurrency market.
Investors of the popular meme crypto token Shiba Inu (SHIB) are brimming with anticipation, forecasting a significant price pump for SHIB during the 2024 bull run.
On-Chain Activity Pushing Shiba Inu To The Upside
According to a March 3rd report by CoinGlass, the notional open interest or the dollar value locked in the active perpetual futures contracts tied to Shiba Inu crossed $100 million for the first time since August 2023.
Currently, futures derivatives tracking Shiba Inu are sized at 1,000 SHIB per contract with up to 25 times leverage.
In the last seven days, the market capitalization of Shiba Inu has surged by 130%.
The hike in open interest combined with an uptick in market cap for SHIB has resulted in an influx of inflows into the second-largest meme cryptocurrency in the world.
Whenever SHIB futures record an above-$100 million open interest, it has been marked with an interim or local price top for Bitcoin (BTC).
Several factors at play are propping up the price of Shiba Inu.
The Shiba Inu ecosystem has been continuously expanding by introducing new utilities and platforms that are enhancing its reputation beyond that of a mere meme token. Diversification of the platform is key in driving investor confidence in SHIB’s long-term potential.
Meanwhile, the SHIB community, also known as the “SHIB Army” remains a formidable force in the market.
Their unwavering support for Shiba Inu plays a significant role in driving demand and fostering a positive sentiment around the dog-themed cryptocurrency.
Launch of Shiba Budz Presents Both Opportunities and Challenges to Shiba Inu
Then there is the launch of Shiba Budz (BUDZ) on the SHIB ecosystem that presents both challenges and opportunities for the meme token platform.
The innovative project is integrating gaming and decentralized finance (DeFi) capabilities and Tree House Wallet functionality into Shiba Inu.
Shiba Budz’s launch is pushing the Shiba Inu team to innovate even further. The competition could also stimulate market interest in meme tokens as a whole, potentially benefiting SHIB.
Speaking on the uptick in trading volume for meme tokens on Korean exchanges, Markus Thielen, founder of 10x Research, said there is a wave of retail activity occurring from altcoins to meme coins.
Analysts Expect Bitcoin to Reach New ATH This Week, But ETFs Are Causing Supply-Demand Imbalance
Thielen also expects Bitcoin to set a new all-time high by the end of the week as inflows into US-based spot BTC exchange-traded funds (ETFs) continue to be significantly higher than the number of Bitcoins created in a day.
This has caused the apex cryptocurrency’s supply-demand imbalance to grow to 1:10 – which is the rate of BTC mined daily vs demand for shares in Bitcoin-backed ETFs.
He highlighted that over-the-counter (OTC) trading desks are dealing with a large number of institutional clients wanting to invest in Bitcoin, which has resulted in their balances decreasing from nearly 10,000 BTC in Q2 2023 to less than 2,000 BTC in Q4 2023.
What this indicates is that institutions, such as spot Bitcoin ETF issuers, will be pushed to purchase Bitcoin directly from crypto exchanges.
Last week, outflows from the Grayscale Bitcoin Trust ETF (GBTC) gathered pace, with the fund losing $600 million in a trading day, suffering its largest single-day redemption in over a month.
Meanwhile, inflows into BlackRock’s iShares Bitcoin Trust ETF (IBIT) cooled to $202 million on Friday when the markets closed. This was after the fund recorded three consecutive days in the $500 to $600 million range.
Thielen believes the slowdown is just a temporary month-end phenomenon and inflows could make a strong comeback this week.
“Bitcoin will make a big move up,” he said.
At the time of writing, BTC is trading in the $67,000 range – up 5.5% in the last 24 hours. Meanwhile, SHIB is changing hands at $0.00003919 – up a whopping 70% during the same period.
