Shiba Inu Rings Greed Alarm As Bitcoin Eyes Record High: Open interest in SHIB futures has crossed $100 million, indicating growing speculation in the market.
From May 29-31, 2024, the largest and most established global hub for all things crypto, blockchain, and Web3 will occur in Austin, Texas. Here are some highlights:
- Open interest in SHIB futures has exceeded $100 million, suggesting a speculative frenzy.
- An analyst noted that the supply-demand imbalance for Bitcoin has widened to 1:10, signaling a potential rally to record highs this week.
There’s a noticeable buildup of speculative activity in the crypto market, urging caution for bitcoin enthusiasts as the leading cryptocurrency aims for new highs.
The dollar value locked in active perpetual futures contracts tied to the meme cryptocurrency Shiba Inu (SHIB) has exceeded $100 million for the first time since August 2023, according to CoinGlass. These SHIB futures contracts are sized at 1,000 SHIB each, with leverage up to 25 times.
In the last week, SHIB’s market capitalization has soared over 130% to $13.44 million, outpacing the 22% rise in the CoinDesk 20 index. An increase in open interest alongside a surge in market value indicates a fresh influx of money into SHIB. Still, it also signals speculative excess and a potential correction for the broader market.
Previous instances where open interest in SHIB futures exceeded $100 million have coincided with temporary or local peaks in bitcoin prices.
SHIB isn’t the only indicator of speculative activity. Data from 10X Research shows that trading volumes in South Korea have recently averaged around $8 billion, a significant jump from the $1 billion per day observed before the bitcoin bull run gained momentum.
Markus Thielen, founder of 10X Research, mentioned, “There is a wave of retail activity moving from altcoins to meme-coins,” referring to the increase in trading volume on Korean exchanges.
Thielen added that bitcoin could reach an all-time high above $69,000 this week as inflows into U.S.-based spot ETFs continue to outpace the number of BTCs created daily significantly. This has caused the supply-demand imbalance to expand to 1:10.
“Over-the-counter (OTC) trading desks are dealing with large institutional clients, and according to their aggregate inventory data, balances have decreased from nearly 10,000 Bitcoins in Q2 2023 to less than 2,000. This indicates that institutions, such as Bitcoin ETF issuers through their market makers, will need to purchase Bitcoins directly from exchanges. The supply-demand imbalance is 1:10 (daily mined vs. daily ETF demand),” Thielen noted.
Outflows from Grayscale’s spot ETF (GBTC) accelerated late last week, with the fund losing $600 million on Thursday, its most significant single-day redemption in over a month. Meanwhile, according to 10X Research, inflows into BlackRock’s IBIT cooled to $202 million on Friday after three consecutive days of $500-600 million.
Thielen believes the slowdown is a temporary month-end phenomenon and expects strong inflows to resume this week.
“We expect BlackRock inflows to resume this week. If Grayscale’s outflows drop to less than $100 million, bitcoin could make a significant upward move,” Thielen noted
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