Investors are again pouring money into meme-focused cryptocurrency Shiba Inu (SHIB) in a sign of caution for bitcoin traders.
Open interest in Binance’s SHIB futures has more than doubled to $101.65 million this month, hitting the highest since Feb. 5, according to data source Coinglass. SHIB futures are sized at 1000 SHIB per contract with up to 25x leverage.
SHIB’s market value has jumped nearly 32% to $6.58 billion amid optimism that an impending layer 2 launch will help the cryptocurrency shed its meme coin tag.
An increase in open interest alongside a rise in market capitalization suggests an influx of new money in the SHIB market. This scenario has historically presaged weakness in bitcoin, the leading cryptocurrency by market value.
SHIB’s open interest has risen above the $100 million mark at least seven times since its inception. The previous six spikes marked local bitcoin price tops.
The pattern is consistent with traditional markets where outsized gains in meme stocks relative to defensive plays are seen as a contrary indicator for the broader market. Bitcoin, the leading cryptocurrency by market value, has traded dead flat near $30,000 this month amid the SHIB rally, CoinDesk data show.
Past performance, however, is not a guarantee of future results and some analysts expect bitcoin to resume the uptrend.