The cryptocurrency market often experiences fluctuations in asset prices, leaving investors wondering about the factors influencing these changes. In recent news, the price of Shiba Inu (SHIB) has dropped, causing concern among its community. However, analyzing on-chain data reveals an interesting correlation between the growth of the Shibarium Layer-2 network and the increase in SHIB token burn rate. In this blog post, we will delve into these phenomena and explore the potential implications for SHIB prices.

The Rise of Shibarium and Increased Token Burn Rate:

Shibarium, the Layer-2 network built upon the Shiba Inu ecosystem, has witnessed significant growth in network activity. As the network expands, the token burn rate has surged, indicating increased usage and demand for SHIB tokens. This development could potentially lead to an eventual rise in SHIB prices, provided the demand remains steady.

Analyzing this correlation between the Shibarium network’s growth and the token burn rate suggests a connection between these two trends. As more users flock to the network, engaging in decentralized applications (dApps) and utilizing SHIB tokens for various purposes, the burn rate naturally increases. Investors should keep a close eye on these dynamics to understand how they may impact SHIB price movements.

Support and Resistance Levels for SHIB Prices:

On-chain indicators can provide insights into potential support and resistance levels for SHIB prices. These levels establish boundaries within which SHIB’s price is likely to fluctuate. By examining historical data and tracking transaction volumes, traders and investors can anticipate key levels at which SHIB may encounter buying or selling pressure.

While this analysis can offer valuable guidance, it is important to remember that it is for informational purposes only. It should not be considered financial advice, as cryptocurrency markets can be volatile and unpredictable. Investors should conduct thorough research and consult with professionals before making any financial decisions.

Market Concerns and FTX’s Cryptocurrency Holdings:

Recent market concerns arose when FTX announced plans to sell its $3.4 billion crypto holdings, including significant amounts of Solana’s SOL and Bitcoin (BTC). However, experts believe that the selling pressure might not be as significant as anticipated, as some assets are subject to limitations and lock-ups. Despite the initial market decline, BTC has since rebounded to its pre-sell-off level.

Future Sell-Side Pressures:

In addition to FTX’s selling announcement, there are other potential sell-side pressures that market participants should consider. These include the sell-off of seized bitcoins linked to the Silk Road and the possibility of asset recoveries from the Mt. Gox hack. These events could introduce additional volatility and uncertainty into the cryptocurrency market.

Retail Central Bank Digital Currency (rCBDC) and Project Sela:

In other news, the Bank for International Settlements, alongside the central banks of Hong Kong and Israel, announced the results of Project Sela. This initiative aimed at creating a retail central bank digital currency (rCBDC) through collaboration with private intermediaries. The project proposed an “Access Enabler” to facilitate customer-facing activities, ensuring security and control for users.

Private financial institutions would be able to provide financial services within this ecosystem, increasing competition and user access. The central banks would handle the ledger and settlement of the rCBDC while users retain control over their electronic wallets. The report also explores the limitations of real-time gross settlement (RTGS) systems and suggests potential solutions.

Understanding the dynamics shaping cryptocurrency markets requires thorough analysis and examination of various factors. The recent price drop in Shiba Inu (SHIB) highlights the importance of assessing on-chain data and recognizing the correlation between the growth of the Shibarium Layer-2 network and the token burn rate. By staying informed and considering the broader market landscape, investors can make more informed decisions. Nonetheless, it is crucial to exercise caution and seek professional advice before making any investment choices.