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SHIB continues to reach new all-time highs, but what is the true motivation behind the altcoin’s moon mission?
Meme coins exploded onto the scene in early 2021, helping to kickstart the bull market after Dogecoin (DOGE) rallied above $0.01 to new highs while being shilled by Elon Musk and Mark Cuban.
Shiba Inu (SHIB) was one of the projects that quickly gained traction and sailed higher after Dogecoin clones and other canine-themed tokens appeared to ride the wave of bullish momentum.
Now that Bitcoin (BTC) has reached a new all-time high, it appears that meme tokens are ready to continue their run, and this time they’re not waiting for big-name influencers to join in. SHIB has skyrocketed to new highs in the last two weeks, leaving befuddled cryptocurrency traders scratching their heads as to why.
Data from TradingView shows that since trading at a low of $0.0000069 on Oct. 1, the price of SHIB has scorched 914% higher to a new record high at $0.0000699 on Oct. 27 as its 24-hour trading volume surged 137% to $24.67 billion.
Three reasons for the surging price and trading volume for Shiba Inu include its listing on multiple exchanges, the launch of its own line of Shiboshi nonfungible tokens (NFTs) and SHIB’s surging open interest on derivative exchanges.
Exchange listings increase access to SHIB
The increased user access to the token as a result of its listing on multiple cryptocurrency exchanges has been one of the most important factors in helping to lift the price of SHIB over the past month.
The BitKan exchange, AOFEX, StealthEx, and CoinFlex are among the new SHIB and LEASH token listings. To commemorate the listing of LEASH, Change Now also launched a “flip DOGE for SHIB campaign.”
The ecosystem gained momentum after it was announced that a partnership with the crypto payment provider NOWPayments made it possible for SHIB and LEASH to be accepted as a form of payment, used for donations, and issued salaries in cryptocurrency via the mass payment feature.
As an added deflationary feature, 3% of the profit NOWPayments receives from all SHIB transactions will be burned.
A second reason for the building strength of Shiba Inu was the launch of its own line of NFTs known as Shiboshi’s.
— pb5_five (@pb5_five) October 12, 2021
NFTs remain one of the most popular sectors of the cryptocurrency ecosystem, and they are a dependable way for projects to increase community interaction and support.
The Shiboshi drop included 10,000 individual NFTs, which community members could purchase for 24 hours using the protocol’s LEASH token.
Shiboshis have now been minted and are available on the OpenSea NFT marketplace.
Surging open interest
A third reason for the rising strength of SHIB has been the surge in futures open interest (OI) on multiple exchanges including OKEx, FTX and Huobi.
As shown in the chart above, the OI for SHIB increased from $15.7 million on October 3 to a record $178.95 million on October 27 as the price of SHIB reached a new all-time high.
As per markets analyst Marcel Pechman, “the open interest seems to be following the price pump instead of an actual increase.”
What is interesting to note is that while it’s “usually expected during bull runs for sellers to have their position liquidated,” that did not happen in this recent run-up which means traders either “doubled the short by adding more margin,” which Pechman sees as unlikely, or “those are market makers who are fully hedged and don’t care about the price.”
“Longs are in huge profit, so it’s easier for them to keep buying spot and pushing the price up. There seem to be no ‘real’ short-sellers, only market makers. Had there been huge liquidations, the open interest would have gone down.”