Where Shiba Inu (SHIB) has experienced a huge rally in recent weeks, it now seems to be losing some of its strength. What will happen to the altcoin?
Value has fallen 4%
The token had made a double-digit gain after crypto exchange Kraken had it listed for trade. Also announced the e-retailer ‘Newegg’ indicates that it will accept the digital asset as a form of payment. But on Wednesday, the token fell more than 4%. This was revealed by data provided by CoinGecko.com.
Both major and minor announcements earlier this year tended to send altcoin prices skyrocketing. But they now appear to be affected by the Federal Reserve’s announcement that it may withdraw its stimulus. This is what Matt Maley, the chief market strategist for Miller Tobacco + Co thinks. Maley reported the following about this:
“Had this announcement been made a month ago, when the Fed was still considered very accommodative, the response would have been much more positive.”
Over the past 20 months, some of the success of many cryptocurrencies, including Shiba Inu, can be attributed to massive amounts of liquidity in the system, Maley said. This liquidity therefore increased at a rapid pace. However, it is not known whether this liquidity will continue to grow steadily over the long term. Although this may be expected, it does not yet offer complete certainty.
The volatile crypto market
However, SHIB trading, as with many other cryptocurrencies, is extreme been volatile. Some Twitter statements by, among others, Elon Musk have caused prices to fluctuate considerably. SHIB plummeted at one point in October this year, after the Tesla CEO said he didn’t own one. According to CoinGecko.com, the coin is down about 45% since it peaked in October.
Still, the SHIB token is currently among the largest cryptocurrencies, according to data sourced from CoinGecko.com. The popular altcoin currently has a market value of approximately $25 billion. That puts its value on par with that of, say, S&P 500 member Southwest Airlines Co. of crypto platform FRNT Financial Inc., said the following:
“While SHIB certainly won’t be accused of being ‘undervalued’ at market cap of 25 billion, one good reason for its underperformance in the near term is likely due to ‘sell-the-news’ flows after its recent alongside some major exchanges such as Coinbase.”