Speculative fervor in the cryptocurrency market raises concerns among bitcoin (BTC) enthusiasts as shiba inu (SHIB), a meme cryptocurrency, sees a surge in notional open interest exceeding $100 million for the first time since August 2023. Per CoinGlass, SHIB futures contracts, sized at 1,000 SHIB per contract with up to 25 times leverage, are driving this speculative activity.
Over the past week, SHIB's market capitalization has soared by over 130% to $13.44 million, surpassing the 22% rise in the CoinDesk 20 index. The surge in open interest coupled with the uptick in market value indicates a significant influx of new capital into SHIB. However, analysts warn that this exuberance signals speculative excess and hints at a looming correction in the broader market. Historically, instances of SHIB futures open interest surpassing $100 million have coincided with interim or local tops in bitcoin prices.
The notional open interest has crossed above $100 million. (CoinGlass) (CoinGlass)
The speculative frenzy isn't confined to SHIB alone. Data from 10X Research reveals a substantial increase in trading volumes in South Korea, averaging around $8 billion recently, up from $1 billion per day before the onset of the bitcoin bull run. Markus Thielen, founder of 10X Research, attributes this surge to a wave of retail activity, encompassing not only altcoins but also meme-coins.
Thielen predicts that bitcoin could surpass its previous all-time high of $69,000 this week, driven by robust inflows into U.S.-based spot ETFs. The imbalance between supply and demand, with inflows into ETFs outpacing daily BTC creation, underscores growing institutional interest. Thielen highlights the decreasing inventory balances on over-the-counter (OTC) trading desks, indicating a need for institutional ETF issuers to purchase bitcoins directly from exchanges.
Despite the bullish sentiment, outflows from Grayscale's spot ETF (GBTC) intensified last week, with the fund experiencing its largest single-day redemption of $600 million in over a month. Conversely, inflows into BlackRock's IBIT cooled to $202 million on Friday after three consecutive days of $500-600 million inflows. Thielen attributes this slowdown to a temporary month-end phenomenon, expecting strong inflows to resume in the coming week.
The surge in speculative activity surrounding SHIB and the broader cryptocurrency market raises cautionary flags for bitcoin investors. While institutional inflows and ETF dynamics remain favorable, the market's speculative excesses may precede a correction. Monitoring institutional flows and market sentiment will be crucial in navigating the evolving crypto landscape.
In the complex field of cryptocurrency, Meme coin is like a breath of fresh air. With its unique humorous genes and fanatical pursuit within the community, it has successfully attracted widespread attention from the market.
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