Recently, the popular meme coin Shiba Inu experienced a staggering 699,000% liquidation imbalance as its price plummeted significantly, coinciding with a downturn in the broader cryptocurrency market. This event reignited bearish sentiments, with many market participants feeling uncertain about the coin’s future.
The Mechanics Behind the 699,000% Imbalance
According to data from Coinglass, the massive imbalance was driven by a sharp devaluation of SHIB, which saw a dramatic shift in both long and short positions in a brief timespan. As market volatility surged, Bitcoin’s value dipped below $112,500, significantly impacting altcoins, including Shiba Inu.
During this tumultuous period, Shiba Inu’s value spiraled down to $0.00001206, descending from an intraday peak of $0.00001264. This rapid decline resulted in substantial liquidations of long positions, with approximately $425,230 of long investments vanishing within 24 hours, contrasting sharply with only $11,230 in short position liquidations.
The aftermath left many Shiba Inu investors wary, as bullish activity dwindled while they awaited a clearer market direction. Currently, SHIB’s open interest has fallen by over 4%, standing at $191.38 million, and there’s also been a 2% decrease in derivatives trading volume, which is now at $177.46 million.
A silver lining is that the long/short ratio is currently at 1.0838, indicating a majority of traders are still holding long positions. This scenario may ignite a significant rebound if market conditions stabilize. The ongoing volatility is largely attributed to anticipation surrounding Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium on August 22, where his remarks on interest rates could heavily influence market trends.
Surge in Shiba Inu Burns: A Double-Edged Sword
Notably, Shibburn data reveals a dramatic increase of 2,196% in SHIB burns over the last 24 hours, totaling approximately 1.6 million tokens eliminated. Interestingly, however, this surge is accompanied by a more than 28% decline in burn rates over the past week, with a total of around 72 million tokens disposed of. An uptick in token burns often suggests a bullish sign for meme coins, as it may lead to a potential supply crunch amid rising demand.
This recent uptick in burns directly correlates with the SHIB Chainlink integration, facilitating cross-network token burns. Market analysts, such as Javon Marks, express optimism regarding Shiba Inu’s potential trajectory. Marks anticipates that the meme coin could experience a rally of over 150%, potentially reaching $0.000032, which could be just the beginning of a broader recovery.
As it stands, Shiba Inu’s price floats around $0.00001226, having dipped over 2% within the last day, based on current data from CoinMarketCap.
