simply put

  • The price of Shiba Inu (SHIB) has risen 13% since July 5, leading to a large number of short liquidations in its futures market.

  • On July 6, SHIB recorded its highest single-day short liquidation since March 8, totaling $3.36 million.

  • Despite the recent price surge, activity in the futures market for SHIB remains low.

Shiba Inu ( SHIB ) has seen a small rebound in price over the past few days. Since July 5, the leading meme coin has surged 13% in value.

The rise in the value of SHIB has led to the liquidation of many short positions in its futures market.

Shiba Inu short liquidations rise

Liquidations occur in asset derivatives markets when the value of an asset moves in the opposite direction of the position a trader holds. When this happens, a trader's position is forcibly closed due to insufficient funds.

Short liquidation occurs when a trader holding a short position is forced to buy back an asset at a higher price to cover losses from rising prices. This usually occurs when the price of an asset rises beyond a certain point, forcing traders holding open positions to exit the market as prices rise.

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Since the price increase on July 5, SHIB has seen more short liquidations than long liquidations. In fact, on July 6, SHIB’s long liquidations totaled $3.36 million, 491% higher than long liquidations. This was the highest number of short liquidations on SHIB in a single day since March 8.

Shiba Inu is completely liquidated. Source: Coinglass

However, despite the growth in SHIB’s value over the past few days, its futures market activity remains low, as evidenced by the decline in its futures open interest.

Shiba Inu futures open interest. Source: Coinglass

Futures open interest for an asset measures the total number of open futures contracts/positions that have not yet been closed or settled. When open interest falls, more traders exit their positions without opening new ones.

At press time, SHIB’s futures open interest is valued at $27.61 million, down 23% this month alone. It is currently at its lowest level since February.

SHIB Price Prediction: Current Uptrend May Not Sustain

The current price rally could be short-lived, according to SHIB’s Aroon Up Line on the one-day chart. As of this writing, the indicator’s value is 0%.

The Aroon indicator for an asset measures its trend strength and identifies potential price reversal points. When the upside line is near or at zero, the uptrend is weak and the most recent high was reached a long time ago.

If a correction occurs, the value of SHIB could drop to $0.00001570.

Shiba Inu analysis. Source: TradingView

However, if it maintains its current uptrend, its price could rise to the $0.000017 price level.