- The past few weeks have seen the emergence and downfall of many random tokens.
- This shows that investors are trying other alternatives to Cardano, Polygon, Solana, etc.
- Shiba Inu price has shot up by more than 8% in the past 24 hours but is susceptible to a decline due to a rising potential for profit taking.
The crypto market goes through different phases, which include the rise and fall of different categories of tokens, and currently, that is the situation with meme coins like Shiba Inu and Pepe. While a full-blown meme market rally is pending, the consistent rise in the former of the two tokens does suggest potential corrections on the way.
Shiba Inu price finds interest
Shiba Inu price rallied alongside Pepe to tear through a key barrier appearing in the form of the 200-day Exponential Moving Average (EMA). Sustaining above this level is an entirely different subject since the crypto market is susceptible to shift from being interested in meme coins to some other category of tokens.
SHIB/USD 1-day chart
Over the past few months, this switch in trend has been rather common, with meme coins, Artificial Intelligence (AI) tokens, and layer-2 (L2) tokens being the center of attention. At one point, random tokens such as SUI and the recently rug-pulled project, BALD, also rallied to note immense gains.
This shows that retail investors are currently transfixed on investing in alternatives to the existing bunch of top altcoins such as Cardano, Solana, XRP, etc. Since the long-due alt season has been delayed time and again, it seems like the window for other assets’ profits has opened up.
However, in the case of Shiba Inu, price decline may not be too far away. The Market Value to Realized Value (MVRV) ratio depicts that potential reversal is on the way. The indicator, which measures the profits and losses of investors, recently hit the “danger zone” above 17%.
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Shiba Inu MVRV ratio
This area is synonymous with profit-taking, which is generally followed by corrections. If SHIB faces a similar situation, it is most likely set to lose the support of the 200-day EMA and slip below $0.0000090.
Read more – Pepe price rises 10% as $470 million in market capitalization comes in, but a 5% crash may be imminent
Cryptocurrency metrics FAQs
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
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