Investors are showing caution for Bitcoin traders as they pour money into meme-focused cryptocurrency Shiba Inu (SHIB). According to data source Coinglass, open interest in Binance’s SHIB futures has more than doubled to $101.65 million this month, the highest since February 5. Each SHIB futures contract is sized at 1000 SHIB with up to 25x leverage.
The market value of SHIB has jumped 32% to $6.58 billion, as investors are optimistic that an upcoming layer 2 launch will help the cryptocurrency shed its meme coin tag. The increase in open interest and market capitalization suggests an influx of new money in the SHIB market. This scenario has historically preceded weakness in Bitcoin, the leading cryptocurrency by market value.
The open interest of SHIB has risen above the $100 million mark at least seven times since its inception. The previous six spikes marked local Bitcoin price tops. This pattern is similar to traditional markets, where outsized gains in meme stocks relative to defensive plays are seen as a contrary indicator for the broader market. Bitcoin has traded flat near $30,000 this month, while SHIB rallies, according to market data.
Though past performance is not a guarantee of future results, some analysts expect Bitcoin to resume its uptrend.