Shiba Inu’s Layer-2 Faces Decline in User Activity: SHIB Price Impact
beincrypto.com 07 August 2024 16:04, UTC User activity on Shiba Inu’s (SHIB) Layer 2 (L2) platform Shibarium continues to drop. On Monday, the demand for the network plummeted to a monthly low.
This happened despite the extended decline in the value of Bone ShibaSwap (BONE), the token used to pay transaction fees on the network. BONE’s value has cratered by over 11% in the last month, but this has not done much to attract users to the L2.
Shibarium Fails To Keep its Users
Shibarium is an L2 blockchain built on top of the Ethereum network and designed to improve the Shiba Inu ecosystem. According to data from Shibariumscan, user activity on the L2 has been steadily declining in the past few days.
On Monday, the daily count of unique addresses that completed at least one transaction on Shibarium totaled 321, marking the network’s monthly low. This decline began after the network’s active address count climbed to 1,898 on August 1.
Further, new demand for Shibarium has also decreased. On Tuesday, only six new addresses were created on the network, a 98% drop from the 361 new addresses that used Shibarium on August 1.
Read more: Shiba Inu — A Beginner’s Guide
Due to the fall in new accounts on the network, the number of new transactions also dropped. On Tuesday, this totaled 2,440, declining by 39% from the 4,006 new transactions recorded the previous day.
SHIB Price Prediction: Whales Begin to Take Their Leave
As the broader market grapples with a downturn, SHIB whales have reduced their holdings. This can be gleaned from the 67% decline in the meme coin’s large holders’ netflow over the past seven days.
Large holders are whale addresses that hold over 0.1% of an asset’s circulating supply. Their netflow tracks the difference between the the coins they buy and the amount they sell over a specific period.
When an asset’s large holder netflow declines, its whales are selling their tokens. This is a bearish signal that may prompt retail traders also to distribute their holdings, putting more downward pressure on the coin’s price.
If SHIB whales continue to sell, its price may plunge to $0.000010.
Read more: 12 Best Shiba Inu (SHIB) Wallets in 2024
However, if selling pressure reduces and buying activity gains momentum, the bearish thesis above will be invalidated as the meme coin’s value will rise to $0.000018.
