Shiba Inu (SHIB) Is Dropping After Whales and Musk Pump—More Upside?

Shiba Inu has shown a solid upward trajectory in recent days. The token rose by more than 300 percent in the past week. This has pushed SHIB crypto into the top 20 tokens and it surpassed Stellar, Internet Computer, and Bitcoin Cash at one point. After staging a strong comeback, Shiba Inu has started faltering. On Oct. 8, SHIB’s price was receding and was down almost 28 percent in the morning. After back-to-back volatile movements, investors want to know if Shiba Inu (SHIB) will go back up.

Shiba Inu launched in 2020 with the aim to overtake the original meme cryptocurrency, Dogecoin. The cryptocurrency is named after a Japanese dog breed.

Shiba Inu’s price exploded in recent days. Several positive developments were responsible for this rise. One of the justifications of SHIB’s rise was a tweet from Elon Musk. He tweeted a photo of his Shiba Inu puppy, Floki. In the past Musk’s tweets have been seen as his endorsements of meme cryptos, including Dogecoin and Shiba Inu. Another argument for SHIB’s recent rise was the moves by Shiba Inu whales.

According to Coindesk, data from blockchain data firm Santiment shows that the number of SHIB transactions (worth more than $1 million) has been going up dramatically along with the price rally. According to a wallet-tracking Twitter account, a whale purchase of more than 6 trillion SHIB on Sept. 30 has also been tracked.

After seeing exploding interest and almost quadrupling in a week, the Shiba Inu token has started giving up some of these gains. As of the morning of Oct. 8, SHIB was trading down by 28 percent. One of the most straightforward reasons for the decline in the SHIB token could be profit taking by traders after a huge surge. However, other people are pinning the current drop on a pump-and-dump scheme.

Shytoshi Kusama is the Shiba Inu developer. In a tweet on Oct. 7, he mentioned that the cryptocurrency will introduce transactional burns in partnership with NOWPayments. The Shiba Inu community has been criticizing the fractional burn because burning a considerable percentage of SHIB will take years.

After a huge price rise in a matter of weeks and a subsequent significant decline, many people have started questioning if SHIB is a pump-and-dump scheme. A pump-and-dump is a manipulative scheme where investors try to promote a stock or security they hold and sell it once it rises in value.

To be fair, Shiba Inu doesn’t look like another pump-and-dump scheme. The network is increasing its use cases and trying to shed its meme status. In July, Shiba Inu launched ShibaSwap, which is a decentralized exchange platform (DEX). The total value locked on the platform has surpassed $260 million. The developers are trying to increase its real-world uses. Based on these arguments, it doesn’t seem like a pump-and-dump scheme.

Having said that, the underlying use cases for SHIB are still limited. Most of the current bullish thesis around the token also revolves around the gains if the meme crowd adopts it. The bullish case based on fundamentals is rarely seen. Due to the lack of anything fundamental supporting it, I don’t see the token as a viable long-term investment.

However, SHIB could be used for trading and if Robinhood decides to add to its platform, s SHIBArmy is lobbying for, it could see another spike.