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Why is Shiba Inu Down Double Digits in 24 Hours?

According to CoinMarketCap.com, popular pup meme coin, Shiba Inu, has seen a significant price drop of nearly 15% over the past 24 hours. Originally shilled as a “Dogecoin killer” when it launched in August 2020, the $SHIB token price soared more than 40% in 48 hours when Coinbase announced that it would list the dog-themed coin in September 2021.

Courtesy: CoinMarketCap.com, Shiba Inu, November 4, 2021

While there’s no specific trigger event for this chart drop that pushed Shiba Inu out of the top-10 crypto projects ranked by market cap, Shiba Inu has a serious centralization issue. Its trading page shows that nearly 70% of Shiba’s total circulating supply is consolidated in 10 wallets.

And no one knows if those 10 wallets are all held by different investors or one or two individuals. Regardless, that hyper-concentration of circulating supply lends itself to whale manipulation, which appears to be happening already.

Yesterday, the owner of the largest Shiba Inu wallet moved 40 trillion $SHIB tokens worth $2.7 billion into four different wallet addresses. That type of wallet movement could be a signal of staged divestments coming. Needless to say, even a fractional amount of 40 trillion tokens flushed in the market would dilute the circulating supply and drive price per unit down. This 24-hour decline could be a preemptive exit by retail investors to try and avoid a possible wipeout.

Holders of this project need to continue to be vigilant and do their own research to avoid getting rekt.

On The Flipside

  • Even though Shiba developers have said they want to launch a DEX – which is a differentiator for this meme coin and suggests it’s more than a punchline – the only real value this coin offers is the network effect of its community. But that’s usually not enough to sustain long-term gains and growth.
  • Without strong fundamentals, articulated use case, and a clear development roadmap – this is a highly speculative investment.

Why You Should Care?

Hype coins tend to follow a “mob-type” mentality and FOMO investors. Do your own research and don’t follow the crowd when it comes to crypto investing.

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    This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

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    Author

    Tor Constantino is a former journalist, consultant and current corporate comms executive with an MBA degree and 25+ years of experience - writing about cryptocurrencies and blockchain since 2017. His writing has appeared across the web on Entrepreneur, Forbes, Fortune, CEOWorld and Yahoo!. Tor's views are his own and do not reflect those of his current employer.