Shibarium gas fees surged 2,024%, raising concerns for SHIB’s future.
BONE price increased; high fees may hinder SHIB’s deflationary model.
Shiba Inu [SHIB] faces a critical juncture as gas fees on its layer 2 network, Shibarium, skyrocket by 2,024%. This surge poses significant challenges for SHIB’s deflationary model and its long-term value.
Despite the gas fee concerns, SHIB’s price has recorded consecutive gains, rising by over 5% in the past week, following Bitcoin’s recent rally. However, Shibarium’s transaction volume has dropped sharply, from 30,000 in mid-August to 11,000, raising concerns about the network’s long-term viability.
Meanwhile, Shibarium, which powers SHIB transactions using its native token BONE, has experienced a remarkable rise in activity. Transaction volumes have surged by 70%, from 4,537 to 7,715, while active accounts have increased by 157%, reaching 108, according to ShibariumScan. As a result, BONE has seen a 3% price increase in the last 24 hours, valued at $0.425079.
SHIB developers routinely burn tokens to maintain scarcity. However, with the sharp rise in gas fees, stakeholders may be discouraged from engaging with Shibarium, potentially impacting SHIB’s value. The volume of SHIB burned has already plummeted by 85%, from 1.7 million tokens to just 240,000.
Could SHIB Pull A Rally?
Positive signs remain. The Chaikin Money Flow (CMF) indicator has shown consistent inflows since July, signaling investor optimism. Furthermore, SHIB’s stable adoption rate, currently at 32%, underscores its continued appeal despite market fluctuations.
SHIB Price Chart, Source: Sanbase
Technically, SHIB aims to break out of its consolidation phase, with resistance at $0.00001462 and support at $0.00001271. A successful breakout could propel SHIB to $0.00001699, with further gains possible if momentum sustains. However, failure to breach resistance may result in further consolidation or even losses. In summary, while Shibarium’s growth is notable, soaring gas fees could pose a challenge to SHIB’s deflationary ambitions and long-term growth.
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