Blockchain analytics platform Santiment says that a memecoin which has soared by nearly 400% over the past seven days could be due for a correction.
Santiment points out that the number of Shiba Inu’s (SHIB) active deposits is “extremely high,” which suggests a possible reversal in the future.
“Yellow flags starting here. Extremely high active deposits are suggesting that it’s probably a top forming.”
The crypto analytics firm says that even though SHIB inflow to exchanges is “not very high,” it nevertheless hints that a reversal could be imminent.
“It’s not very high, we would expect to see much higher. But still it’s suggesting the same, probably a top forming.”
Santiment also says that profit-taking by SHIB traders is low, an indication that traders are betting on the price of the memecoin surging even higher. The firm warns that markets often “punish” this kind of overconfidence.
“…potential profit-taking from Shiba is still relatively low, not a whole lot… yet.
We would notice that higher price tops are built on lower profit-taking spikes. This could potentially indicate that traders are becoming too confident on price action, like ‘no need to sell, it’s going to pump more.’ Market tends to punish this sort of confidence.”
Shiba Inu is trading at $0.000034 at time of writing, according to CoinGecko. Since the start of the year when the memecoin was priced at $0.000000000077, SHIB has surged by over 440,000%. SHIB is currently ranked 12th by market cap.
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