Shiba Inu (SHIB) saw its price fall by nearly 5% over 24 hours on July 30 to $0.00001266. The fall, which took SHIB’s weekly loss to 9%, was accompanied by a massive $100 million draining of its open interest—signals dwindling trader optimism and rising bearishness.
According to Coinglass, the open interest in SHIB fell from an all-time high of $328 million on July 22 to as low as $206 million. The heavy fall was among the strongest liquidations of positions for the memecoin in the recent months.
The Cracks Behind the Sell-Off
This $100 million open interest decline is not just a technical change—it’s a great indicator that traders are taking a step back from short-term speculation on SHIB. Open interest represents active derivative positions, and this kind of sudden decline typically indicates a cooling sentiment or risk-off environment in the market.
Notably, this is despite SHIB posting a 10% growth in July. The steep reversal shows that any rally was not determined but rather hinged on hype rather than solidly supported demand.
Shibarium’s Decline Discredits SHIB’s Utility Narrative
After being touted as a change-agent for Shiba Inu, Shibarium layer-2 network is now feeling the strain. The total value locked (TVL) for the platform has dropped to $1.76 million—a whopping 70% from its highs in December 2023.
TVL is a measure of the amount of capital actively invested in a blockchain ecosystem. That it has fallen indicates developers and users are fleeing to greener pastures, presumably in pursuit of more attractive incentives or greater real-world use cases.
Without strong on-chain usage, Shibarium’s vision to increase SHIB’s functionality appears more and more empty.
Can Token Burns Save SHIB?
The Shiba Inu ecosystem has relied long and hard on token burns as a supply-reduction strategy to enhance prices. But in the current market where fundamentals count like never before, burns might not be sufficient.
With SHIB still 85% away from its all-time high, simply reducing supply isn’t reviving demand. Investors are now looking at high-speed infrastructure, actual use cases, or upgraded tokenomics—leaving Shiba Inu struggling to keep up.
What’s Next for Shiba Inu?
Shiba Inu needs to move beyond memecoin popularity and solidify its long-term success with actual utility and development of an ecosystem to get back into the limelight.
In the near term, price volatility could continue as speculators adjust their positions and wider market sentiment remains subdued. Absent fresh developer interest or significant ecosystem enhancements, SHIB faces more bleed-outs in both price and sentiment.
The next few months will determine if Shiba Inu can evolve—or if it’s stuck being a reminder of the previous bull cycle.
