- Shiba Inu’s price is highly correlated (0.72) with Bitcoin, so BTC’s price movement significantly influences SHIB’s market trajectory.
- Whale activity picks up with $140.13 million worth of big SHIB transactions in the past week, which could affect price volatility.
- Retail interest, particularly from western markets, and seasonal decoupling trends have the potential to disrupt SHIB’s typical correlation with BTC.
Popular memecoin Shiba Inu is showing a strong price correlation to the leading cryptocurrency, Bitcoin (BTC). On-chain data provided by IntoTheBlock displays a 0.75 correlation coefficient between the two crypto assets.
Hence, BTC’s price action would greatly influence SHIB’s price action too. However, it remains to be seen whether a BTC rally would cause SHIB’s price to rise to a new peak price.
Shiba Inu’s Growing Dependence on Bitcoin
As is often the case, when BTC is on a bull run, altcoins (including Shiba Inu) usually experience increased capital inflows. Conversely, the same is true – when BTC is downtrending, it drags altcoins, such as SHIB, down with it.
Meanwhile, this correlation is occurring when BTC is still exchanging within its very crucial support and resistance levels. At the time of writing, BTC is trading at around the $91,650 level (short-term holders’ realized price). But a breakout above this level can trigger a rally among other cryptocurrencies.
Source: IntoTheBlock
Whale Activity, Decoupling, and Retail Interest Will Also Affect SHIB’s Price
Though Shiba Inu’s price is strongly correlated with Bitcoin, its specific market dynamics add some variables to its price action. Data from IntoTheBlock also reported higher whale activity since there were $140.13 million worth of transactions involving large holders of SHIB last week.
With 74% of the circulating supply of SHIB meme coin in their pockets, their trading activities could cause relatively extreme price movements for SHIB. In addition, retail interest is a huge factor; for instance, the Western markets contribute to 51% of transactions.
The combination of retail and institutional interests could amplify the price movement driven by Bitcoin. Possible decoupling during meme coin seasons and changes in whale accumulation patterns are other factors that could further influence Shiba Inu’s price direction.
Despite the strong BTC correlation, historical data shows that SHIB usually breaks from BTC’s price direction during periods of strong retail interest or speculation. Hence, investors must continue to monitor BTC’s price charts and SHIB’s on-chain metrics at the same time.
However, it is important to observe that current market conditions indicate that the price action of BTC will be an important factor in predicting the direction of SHIB’s price.
