TL;DR
- Following a substantial price drop, more than 57% of SHIB holders are now in the red, though this remains well below the 90% underwater rate seen in September 2023.
- A small group of 10 wallets holds over 61% of SHIB’s supply, meaning their moves could trigger sharp market shifts, either through heavy selling or strategic accumulation.
Underwater SHIB Investors Pile up
The cryptocurrency market correction seen on February 3 has sent shockwaves across the entire sector, with multiple leading altcoins taking the biggest blow. The popular meme coin Shiba Inu (SHIB) was among the worst affected, experiencing a weekly price collapse of approximately 20%.
Unsurprisingly, the plunge has resulted in an increased percentage of investors currently sitting on paper losses. According to IntoTheBlock, that share has surged to over 57%, while 41% are still in the green. As of writing these lines, less than 2% are break-even.
It is worth mentioning that the percentage is still far from the worrying figures registered in September 2023. Back then, almost 90% of the SHIB holders were underwater.
One element suggesting that the meme coin may experience enhanced volatility in the future, hence changing the share of people sitting on paper profits, is the high level of centralization. As CryptoPotato reported, more than 61% of the total supply is controlled by 10 wallets.
If those whales decide to dump their holdings, the excess of tokens on the market could cause a sharp decline of the valuation. On the other hand, if they accumulate en masse, it might signal confidence in the project, leading to more people joining the ecosystem and upward pressure on the SHIB price.
Are Bulls Ready to Step Up?
Several factors indicate that SHIB may soon return to the green track. One of those is the further advancement of the layer-2 blockchain solution, Shibarium. Most recently, total transactions processed on the network surpassed 900 million. The protocol’s main goal is to enhance the development of the Shiba Inu ecosystem, and according to some industry participants, its progress could benefit the underlying token.
Next on the list is the partnership between the meme coin project and the Ministry of Energy and Infrastructure of the United Arab Emirates. The entities shook hands earlier this week, aiming to transform how nations embrace Web3.
“For the first time, a world government is integrating blockchain at a federal level. This isn’t just another crypto partnership – it’s a nationwide movement unifying Shiba Inu’s Operating System across all Emirates,” the announcement reads.
High-profile partnerships of this type can make Shiba Inu more attractive to investors, positioning it as more than just a speculative asset.
Last but not least, we will touch upon the meme coin’s burn rate, which has exploded by over 1,000% in the past 24 hours. The program’s ultimate goal is to reduce the circulating supply of SHIB, potentially making it more valuable via scarcity.
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