Shiba Inu’s Open Interest (OI) has crashed from its July peak, sparking a bearish sentiment for the foremost meme coin. This development has coincided with the recent crypto market crash, as investors choose to wait on the sidelines amid market uncertainty.
Shiba Inu’s Open Interest Crashes To $190 Million
Coinglass data shows that Shiba Inu’s Open Interest is currently at $190 million, down significantly from its July peak of $328 million recorded on the 22nd of last month. Since then, the OI has declined daily, indicating a drop in interest in the meme coin among traders. Open Interest refers to the number of open positions on an asset at a particular time.
A plausible reason for the drop in Shiba Inu’s Open Interest is the crypto market correction, which has occurred over the last two weeks. SHIB has dropped from its local high of around $0.000016 as a result. Meanwhile, the meme coin is down over 8% in the last seven days. Notably, Shiba Inu had hit this local high on July 21, which highlights the correlation between price performance and this derivatives metric.
One reason for this market correction is the Trump tariffs, which are set to take effect from August 7. The U.S. president yesterday threatened to substantially raise tariffs on India from the current proposed 25%. This is a development that could further impact the markets, including crypto assets like Shiba Inu. The tariffs have a direct impact on the global economy and could negatively impact the flow of liquidity into these assets if they lead to inflation.
Furthermore, the U.S. economy already looks to be in a fragile state, thanks to the July job report, which came in lower than expectations. A weak labor market could have several ripple effects, including a recession or stagflation, which is bearish for Shiba Inu and other assets.
Some Positives For SHIB
The Shiba Inu long/short ratio is currently 1.09, which indicates that most traders are still bullish on the meme coin. This could help spark a market recovery, especially as the broader crypto market picks up. SHIB, alongside other crypto prices, has shown a resurgence on July 4, as the total crypto market surged as much as 2%.
Thanks to this rebound, Shiba Inu’s derivatives trading volume surged as much as 20% to $161 million. Meanwhile, crypto analyst Javon Marks has again doubled down on his prediction that the foremost meme coin can record a 500% rally to reach $0.000081. This will bring SHIB close to its current all-time high (ATH) of $0.00008845.
At the time of writing, the Shiba Inu price is trading at around $0.00001233, up in the last 24 hours, according to data from CoinMarketCap.
Featured image from Getty Images, chart from Tradingview.com
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