Shiba Inu's dramatic drop amid a broader sell-off recovers swiftly, showcasing the volatile nature of meme cryptocurrencies.
In a surprising turn of events, the Shiba Inu (SHIB) cryptocurrency experienced a dramatic price fluctuation on the U.S. exchange Coinbase. During the early hours of a Tuesday morning in Asia, SHIB prices briefly plummeted by 50%, dropping from $0.000044 to $0.000022. This significant drop was part of a broader sell-off that was led by Bitcoin and affected many major tokens. However, this price drop was an anomaly that seemed to be unique to Coinbase, as other exchanges like Bybit and Kraken reported more moderate declines to an average of $0.000036.
The sudden drop in SHIB prices on Coinbase can typically be attributed to a scenario where a large sell order exceeds the current market depth of the exchange. This means that there were not enough buy orders at the time to absorb the sell order without significantly impacting the price. Such events, while rare, can lead to temporary but dramatic price fluctuations.
Despite the sharp decline, SHIB prices showed remarkable resilience by quickly recovering. In fact, within the same 24-hour period, SHIB prices were up by 45%, with spot SHIB volumes on Coinbase crossing the $1.7 billion mark. This recovery is a testament to the volatile nature of cryptocurrency markets and the particular resilience of meme-based cryptocurrencies like Shiba Inu.
The initial surge in SHIB's price, which preceded the drop, was attributed to several factors. Developments in Shibarium, a layer-2 solution aimed at enhancing the Shiba Inu ecosystem, played a significant role. Additionally, there was a significant increase in SHIB's burn rate, which refers to the process of permanently removing coins from circulation, thereby reducing the overall supply and potentially increasing the value of the remaining coins. This period also saw a notable rise in trading volume and whale transactions, indicating growing interest from institutional investors in meme-based cryptocurrencies.
