Could Shibarium’s Relaunch Ignite a Bull Rally for Shiba Inu (SHIB)?
The Shiba Inu (SHIB) team has re-launched the Shibarium L2 network in private mode after the initial launch was fraught with technical problems. SHIB price holds steady at $0.0000008, but on-chain indicators suggest the bulls could return to action at any moment.
Shiba Inu launched the Shibarium mainnet, a layer-2 scaling solution, on August 16 after months of testing that attracted millions of transactions. However, it was quickly halted after a series of technical problems. Presumably, in fears of network vulnerability, Shiba Inu holders have been moving their tokens into self-custody since the initial Shibarium launch.
SHIB Market Supply Has Shrunk Considerably
Despite assurances of a $2 million insurance scheme, Shiba Inu deposited in crypto exchange wallets has now dropped to the lowest in over a year.
Data from Cryptoquant depicts that Shiba Inu Exchange Reserves entered its ongoing decline on August 17, barely after the Shibarium mainnet launch on August 16. Zooming out, the data shows that SHIB Exchange Deposits have not dropped this low since February 2022.
Shiba Inu (SHIB) – Shibarium Could be a Game-Changer | Exchange Reserves, Aug 2023 | CryptoQuant
Exchange Reserves track real-time changes in the total SHIB balances investors hold in recognized crypto exchange wallets. The chart above shows that recent Shiba Inu price uptrends on August 5 and August 12 preceded significant downswings in Exchange Reserves.
Between August 17 and August 26, Shiba Inu holders have withdrawn 1.8 trillion SHIB tokens worth $14.5 million at the current market price of $0.000008. Notably, more than 10% of Shiba Inu’s average trading volume over the past week.
This highlights that another potential supply squeeze after a successful relaunch of Shibarium could be a game changer for SHIB price if the Shibarium FUD subsides and market demand spikes.
The Market Demand is Still Largely Neutral
Presumably, spooked by the recent Shibarium-related network fragilities, Shiba Inu many network participants have refrained from performing transactional activities in recent weeks.
The chart below illustrates that daily Active Addresses on the Shiba Inu network have declined since August 16. As of August 26, it stood at 3,647, down 56% from the 8,214 Active Addresses recorded on August 16.
Shiba Inu (SHIB) – Shibarium Could be a Game-Changer| Active Addresses, Aug 2023 | CryptoQuant
Active Addresses estimates the daily number of participants carrying out economic transactions on a blockchain network. This means the number of investors deploying SHIB for transactions has dropped significantly. Unsurprisingly, SHIB price has continued to trend neutral around the $0.0000008 range over the last few days.
In conclusion, the SHIB price action will hinge significantly on users returning to the network in the coming days. The correlation between the Shibarium fiasco and the drop in market demand signals how a successful relaunch of Shibarium could be a game-changer for SHIB price.
Shiba Inu Price Prediction: Potential Breakout Toward $0.000014
The on-chain data points analyzed above suggest Shiba Inu price will likely retest $0.000014 when the market demand returns.
The In/Out of Money Around Price (IOMAP) data, which shows the entry price distribution of current Shiba Inu holders, also validates this prediction.
The chart below shows that 370,440 holders had bought 272.9 trillion SHIB at the average price of $0.000011. If they sell early, they could cause a momentary pullback. However, if the market demand spikes as predicted, the bulls could promptly push the rally toward $0.000014.
Shiba Inu (SHIB) Price Prediction | IOMAP, August 2023, Source: IntoTheBlock
In contrast, if the Shibarium FUD persists upon relaunch, the bearish traders could force a reversal below $0.000006. But, 133,510 holders had bought 41 trillion SHIB at the average price of $0.000006. They could trigger a rebound if they hold firm.
However, if that support cannot hold, SHIB price could further retrace $0.000006.