July 22, 2024

Shiba Inu Crashes 50% On Coinbase, An Indicator For More Meme Crypto Mayhem?

Shiba Inu's 50% Flash Crash On Coinbase, An Indicator For More Meme Crypto Mayhem?

Shiba Inu's 50% Flash Crash On Coinbase, An Indicator For More Meme Crypto Mayhem?

Shiba Inu (SHIB) experienced a brief but significant drop in value on the U.S. exchange Coinbase, plunging by 50% during early trading hours in Asia on Tuesday. Another example that shows the unpredictable nature of cryptocurrency markets, particularly within the meme coin sector.

+50 drop

A Brief Descent

Shiba Inu plummeted from $0.000044 to $0.000022 on Coinbase amid a wider sell-off affecting major tokens, including Bitcoin (BTC). This sharp decline contrasted with more moderate price movements on other exchanges like Bybit and Kraken, where SHIB’s price fell to an average of $0.000036.

Such dramatic price movements typically occur when a large sell order surpasses the available liquidity or market depth on an exchange. At the time of the incident, the market depth for SHIB on Coinbase was reported at $1.2 million, indicating a relatively thin liquidity pool that could not absorb the sell pressure, leading to the steep price drop.

Recovery and Volume Surge

Despite the precipitous decline, Shiba Inu’s price quickly rebounded on Coinbase. Furthermore, SHIB trading volumes on Coinbase surged past $1.7 billion in the 24-hour period following the drop, marking the highest volume among its peers on the platform. The heightened interest and participation in SHIB trading was particularly present among U.S.-based retail investors.

The brief sell-off occurred amidst a broader rally in the meme coin sector, which has seen over 100% growth in the past week, according to data from CoinGecko. Despite the early morning fluctuations, SHIB prices concluded the 24-hour window with a 45% increase, outperforming the broader CoinDesk 20 index (CD20), which rose by 3%.

About Shiba Inu

Launched in August 2020 by “Ryoshi”, Shiba Inu (SHIB) is a decentralized, meme-inspired cryptocurrency featuring the Japanese Shiba Inu dog breed as its symbol, similar to Dogecoin. Dubbed a “meme coin”, it has drawn attention for its massive holdings by a single entity and its popularity among investors chasing trends.

Shiba Inu Price Evolution

Initially marketed as a Dogecoin rival, SHIB saw a significant valuation spike in May 2021 when Ethereum co-founder Vitalik Buterin donated 50 trillion SHIB to a COVID relief fund in India. The token’s value surged by 240% in October 2021, but by November, it had declined by around 55%.