Shiba Inu’s (SHIB), has been stronger than its main “memecoin” rival Dogecoin in the past two months. This is partly due to token’s periodic token burning events as well as a flurry project announcements that promise to increase its utility.
Why is the SHIB market soaring?
SHIB/DOGE gained just over 40% from 0.0001120 on May 12th, its lowest point on record.
Chart of the four-hour SHIB/USD price. Source: TradingView
SHIB’s recent rally against DOGE is based on coin burn.
This involves sending SHIB tokens without a master to a wallet, which means that they are permanently removed from circulation against the total of one quadrillion supply. Half of these were sent to Vitalik Buterin, Ethereum’s cofounder.
According to ShibBurn.com, the Shiba Inu network had burned more than 410 trillion SHIB tokens from its initial supply ($4.5 Billion at today’s prices).
Shiba Inu supplies Source: ShibBurn.com
Dogecoin doesn’t have a coin burning feature and has an unlimited supply. This could be a reason for traders to hold SHIB rather than DOGE, especially during a crypto bearish market in which almost all digital assets are against the U.S. dollar.
JUST IN: $SHIB @Shibtoken is back on top 10 purchased tokens among 1000 biggest #ETH whales in the last 24hrs Peep the top 100 whales here: https://t.co/jFn1zIOq03 (and hodl $BBW to see data for the top 1000! )#SHIB #whalestats #babywhale #BBW pic.twitter.com/2o5A0yhHy4
— WhaleStats – BabyWhale ($BBW), (@WhaleStats), July 5, 2022
SHIB’s losses to the U.S. Dollar since May 12 are around -7.5%, compared with DOGE’s 17.5% losses during the same period.
Daily price chart for SHIB/USD and DOGE/USD Source: TradingView
The ecosystem of Shiba Inu grows
Shiba Inu launched with the promise of a better Dogecoin.
This project tried to do so by offering potential applications such as smart contracts, decentralized exchange ShibaSwap which allows users to stake SHIB in order for “BONE” or “LEASH,” two tokens that are part of the Shiba Inu ecosystem.
ShibaSwap trading volume. Source: Nomics.com
Shytoshi Kusama, a pseudonymous developer for Shiba Inu (not to be mistaken with the blockchain project Kusama), launched an “algorithmic stabilitycoin” called “SHI” on July 6. This was accompanied by a reward token “TREAT”, and a collectible game card.
Dogecoin, on the other hand, has Elon Musk, CEO of Tesla, SpaceX and who has enabled DOGE payments at their online merchandise stores. He is also exploring the possibility of doing the same via Twitter.
Musk’s Boring Company enabled Dogecoin payments earlier this week for its Las Vegas transit system, “Loop”
What’s next for SHIP/DOGE?
SHIB’s continued rally against DOGE is at risk of exhaustion because of a classic bearish reverse pattern.
SHIB/DOGE has been moving within a rising wedge that is defined by two converging, ascending trendlines. Rising wedges are usually resolved when the price breaks below their lower trendlines. This is often accompanied by an increase in trading volume.
Related: Bitcoin price rises to $21.8K but analysts warn it could be a fraud
The breakdown move could theoretically pull the price to a level that is equal to the distance between the wedge’s lower and upper trendlines. Below is a chart showing SHIB/DOGE with a similar setup.
Daily price chart for SHIB/DOGE with ‘rising wedge’ breakdown. Source: TradingView
The pair could fall to the 0.0001233-0.0001348 price range depending on its breakdown point. This would be a drop of 15-20% from current levels.
com. You should do your research before making any investment or trading decision.
I am a technology and gaming writer by profession. I love NFT’s and play to earn gaming such as Axie Infinity. I love writing about anything on the blockchain, especially gaming and entertainment. I often sing, write or draw to portray my feelings. When it comes to my free time or you can say ‘ME-TIME’, I love to play with my cat, sleep an extra hour, or play my favorite video games.