Highlights
- The LIBRA memecoin’s collapse has raised broader FUD in the memecoin sector.
- Shibarium transactions dropped from over 4.5 million to under 90,970 in a week.
- The burn rate for SHIB has fallen by 23.7%, signaling reduced community engagement.
Shiba Inu coin, one of the most well-known memecoins, is currently facing a significant price decline, trading at $0.00001550 as of this writing.
Recent rug pulls in the memecoin space have left investors feeling uneasy, prompting many to distance themselves from the sector.
The outlook appears grim, with various data points indicating a sustained negative trend ahead. This is particularly surprising given the past successes that once fueled hope within the community. However, Shiba Inu price is now struggling, and key metrics suggest a decline in momentum.
As the community grapples with these challenges, many are left wondering about the reasons behind the selloff of Shiba Inu coin.
Continue reading to know more.
Rug Pulls, Including LIBRA Worsen FUD in the Memecoin Segment
A major factor contributing to the decline of Shiba Inu is the tumultuous fate of the LIBRA memecoin.
Although the two are unconnected, the negative outlook surrounding LIBRA is casting a shadow over other volatile memecoins.
Initially, Argentinian President Javier Milei endorsed LIBRA, claiming it would strengthen the national economy. This endorsement sparked a brief surge in the coin’s price, but it soon came crashing down.
LIBRA is one of the most damaging rug pulls in recent history. According to crypto firm LMK, at least 24 addresses lost over $1 Million, while 61 others faced losses exceeding $500,000.
One unfortunate investor who spent $5.6 Million to acquire 2.1 million LIBRA tokens ended up selling for just $430,000, resulting in a staggering loss of $5.1 Million.
In response to the fallout, Milei has launched an investigation into the coin, establishing an ‘Investigation Task Unit.’
Many are curious about how these rug pulls occurred; early insiders received a disproportionate share of the LIBRA token supply, enabling them to manipulate the market and execute large sell-offs.
This manipulation led to a dramatic 95% crash in the token’s value just hours after its launch, erasing its entire valuation almost instantly.
The fallout from LIBRA has negatively impacted market sentiment across the board. A similar trend was observed with the TRUMP memecoin, which skyrocketed to a $75 Billion market cap before plummeting.
The swift decline of LIBRA has also affected on-chain data, raising fears among investors about the stability of other memecoins, including Shiba Inu.
Experts are now questioning whether Shiba Inu is dead or still worth monitoring. The current situation remains uncertain, and investors can only watch trends to gauge what might happen next.
While opinions vary, some still believe that Shiba Inu could rebound if market sentiment shifts in its favor.
Shibarium Transaction Count has Declined
One noticeable shift for Shiba Inu is the significant decline in transactions on Shibarium, its layer-2 blockchain network.
Recent data shows that daily transactions have plummeted from over 4.5 million last week to just under 90,970 as of February 18. This dramatic drop indicates a substantial decrease in user engagement.
Shibarium was launched to enhance SHIB’s scalability and lower transaction costs, but the recent slowdown raises concerns about its effectiveness and the future of the network.
With 9,536,658 blocks processed and an average block time of 5.0 seconds, the network’s performance does not seem to be making a meaningful impact, leaving Shiba Inu investors anxious about what lies ahead.
It’s important to note that if this trend of declining network usage continues, it could have negative implications for SHIB. Low transaction volumes often signal reduced investor confidence, which could further affect the coin’s market position.
SHIB Burn Affected by FUD?
The Shiba Inu burn mechanism, intended to decrease the token’s circulating supply and create scarcity, has also seen a decline.
In the past 24-48 hours, only 16,122,637 SHIB tokens were removed from circulation, representing a 23.7% drop in the burn rate, according to data from Shibburn.
Historically, a higher burn rate has provided SHIB holders with optimism, as a reduction in supply can lead to increased scarcity, potentially driving the growth of Shiba Inu coin.
However, the recent downturn indicates that community-driven efforts to achieve this scarcity are losing momentum.
At press time, there are 584,297,402,904,694 SHIB tokens in circulation out of a total supply of 589,255,503,464,882 SHIB.
The maximum total supply of Shiba Inu coin is capped at 999,982,339,482,145 SHIB, which does not include the 4,958,100,560,187 SHIB that are currently staked (xSHIB).
This situation further complicates the dynamics of liquid supply and raises concerns about the future of the token.
Disclaimer
In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
