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Dogecoin (CRYPTO: DOGE) rival Shiba inu (CRYPTO: SHIB) has seen three-day price spikes of 258% and on-chain activity is “extremely high,” according to data provider Santiment.
What happened: The SHIB hit a four-month high of $ 0.0000346 on Wednesday after investors in whales made several large investments in the previous days.
According to the on-chain and social metrics platform Santiment, current metrics point to peak formation potential.
Active deposits on Shiba Inu’s network have skyrocketed and that’s bad news for its price.
“Yellow flags starting here. Extremely high active deposits suggest this is likely a peak in the making, ”Santiment analysts said.
Looking at the measure of “lost network profits”, they found that potential profit taking is still relatively small. However, as they zoomed in, they noticed that higher prices are built on spikes in lower profit taking.
“This could potentially indicate that traders are becoming overconfident about price action, like ‘no need to sell, it’s going to pump more.’ The market tends to punish that kind of trust,” Santiment said.
Another yellow flag for SHIB is the number of whale transactions. A high number of whale transactions, as seen in recent days, generally equates to a higher local price, Santiment noted.
Overall, Santiment concluded that “a fair amount of superior signals are visible” and classified the token as high risk and low reward.
Price action: As of going to press Thursday, SHIB was trading at 0.00002588, gaining 17.60% on a 24-hour basis and the coin had a daily trading volume of $ 18.6 billion.
Photo by Melody Less on Unsplash
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