Investors are once again pouring money into the meme-focused cryptocurrency Shiba Inu (SHIB) in a sign of caution for bitcoin traders.
Open interest in Binance’s SHIB futures more than doubled to $101.65 million this month, marking the highest level since February 5, according to Data source Coinglass. SHIB futures contract size is 1,000 SHIB per contract with up to 25x leverage.
SHIB’s market capitalization jumped about 32% to $6.58 billion amid optimism that the imminent launch of the second layer will help the cryptocurrency shed the coin meme tag.
An increase in open interest along with a rise in market capitalization indicates an influx of new funds into the SHIB market. This scenario has historically foreshadowed the weakness of Bitcoin, the leading cryptocurrency by market capitalization.
SHIB’s open interest has risen to more than $100 million at least seven times since its inception. The previous six highs were marked by local bitcoin price peaks.
This pattern is consistent with traditional markets where Mimi shares huge gains relative to defensive plays seen as A contrarian indicator of the broader market. CoinDesk data showed that bitcoin, the leading cryptocurrency by market capitalization, has been trading flat near $30,000 this month amid a rally in SHIB.
However, past performance is not a guarantee of future results and some analysts expect bitcoin to resume its upward trend.
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