How Shibarium’s declining user count has affected SHIB

Journalist

Posted: February 22, 2024

• Shibarium, Shiba Inu’s layer-2 ecosystem, experienced a surge but failed to attract new users.
• The price of the SHIB token fell as sentiment declined.

Shibarium, a layer-2 ecosystem on the Shiba Inu [SHIB] network, witnessed a massive surge in activity over the last few days. However, the number of new users being attracted to the network had declined.

Losing interest?

This indicated that activity was driven by existing users on the Shibarium network, and the protocol had failed to attract new users. This could impact the overall ecosystem of Shiba Inu negatively.

A declining number of new users signing up on a network may result in a reduction in liquidity. It may also signal the waning popularity of Shiba Inu’s ecosystem, which could have adverse impacts on its price.

Source: Shibariumscan

A decline in SHIB’s price

At press time, SHIB was trading at $0.00000942 and its price had fallen by 2.93% in the last 24 hours. Despite the price decline, SHIB had not lost its footing in the social media space.

This was showcased by the Social Volume around SHIB, which remained consistent over the last few days. However, Weighted Sentiment around the meme coin had declined.

A declining Weighted Sentiment suggested that negative comments around SHIB outnumbered the positive ones at the time of writing.

Social sentiment plays a huge role in determining the price of meme coins, and bearish sentiment on the social front could have adverse effects on the token.

Source: Santiment

Despite the recent price correction, SHIB’s Network Growth grew. This implied that there was a spike in the SHIB by new addresses.

If accumulation by new addresses continues to grow, it may help reverse the bearish movement of SHIB’s price.

The velocity at which SHIB was trading had also grown, implying that the frequency at which SHIB was trading had surged.

Source: Santiment

Burning it up

The burning of SHIB tokens may assist the growth of SHIB’s price as well. In the last 24 hours, 2,000,000 SHIB tokens were burned.

When tokens are burned, they are permanently removed from circulation, reducing the overall token supply.

Read Shiba Inu’s [SHIB] Price Prediction 2024-25

This reduction in supply, if demand remains constant or increases, can potentially lead to an increase in the value of each remaining SHIB token.

It creates a deflationary effect, making each token scarcer and potentially more valuable.

Source: X