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Shibarium and Twitter (X) are Key to SHIB Price Action: Analyst Michaël van de Poppe Says

Published August 31, 2023 11:15 AM
Teuta Franjkovic
Published August 31, 2023 11:15 AM
Key Takeaways
  • Expert Michaël van de Poppe identifies ‘Buy the Rumor, Sell the News’ pattern.
  • He emphasizes technical challenges and Shibarium’s significance.
  • Van de Poppe said X mulling crypto payments is a potential boost for Dogecoin.
  • Shiba Inu’s fate is intertwined amid correlations and Shibarium’s promise.

Recently, Shibarium (SHIB) has reached  100,000 wallets on its platform and, at the same time, investors were made aware of Elon Musk’s plans to turn X (formerly Twitter) into a “updated version of PayPal” by an insider leak at the US Securities and Exchange Commission (SEC).

Could the Twitter crypto add-on help SHIB blockchain which, after the initial launch, was plagued by technical problems remains questionable. Shibarium was relaunched on August 28. For gas fees, Shibarium uses SHIB. The initiative also concentrated on getting gaming and metaverse apps onto the platform.

But last week, holders of SHIB withdrew  1.8 trillion SHIB tokens, which are worth about $14.5 million.

Within a 24-hour period, the number of wallet addresses rose  from 65,000 to 100,000, with an average block time of 5.0 seconds and a total of almost 420,000 transactions.

‘Buy the Rumor, Sell the News’ Effect Lead to Market Corrections

CCN interviewed Michaël van de Poppe, the CEO and founder of MN Trading BV. According to him, the current price action of Shiba Inu might be a textbook example of the “buy the rumor, sell the news” phenomenon.

The significant hype generated within the community before the event tends to result in overvaluation of the asset when the event finally takes place.

Afterward, van de Poppe explains, ‘the price corrects downward (often even beyond its actual value) to reach equilibrium, ensuring that the hype subsides.’ This is precisely what occurred with Shiba Inu during the recent event.”

“In addition, the initial technical challenges in the first few days contributed to driving down the prices of Shiba Inu even further (coupled with less favorable market momentum),’ he pointed out.

Just as a reminder, as part of a larger strategy to establish Shiba Inu as a legitimate blockchain project, Shibarium is an Ethereum layer-2 network that charges transaction fees using SHIB tokens. It focuses on metaverse and gaming applications while serving as a low-cost foundation for DeFi apps built on top of it.

Shibarium’s testing phase was a great success, with millions of wallets taking part and carrying out over 22 million transactions over a four-month period.

But shortly after being live, the network abruptly lost steam. Millions of dollars were held on a bridge, or a device that transmits tokens across multiple networks, for at least eleven hours after Shibarium transactions became online. Prices for SHIB dropped 10% at the time.

Developers replied to the outage by claiming that “there was no bridge issue” and that the issue developed as a result of a previously reported unusually large volume of user transactions. They stated that servers broke down because users clogged the network with transactions that were significantly more than those servers could handle.

Since then, they have asserted that the network has a “new monitoring system and additional fail-safes” in place to stop a “huge level of traffic again.”

Potential Boost for DOGE, SHIB as Twitter mulls Crypto Payments

As previously reported, X (formerly known as Twitter) has obtained the required license to offer Bitcoin trading and payment services in the US. According to van de Poppe, this development could indirectly impact Sibarium.

X obtained a Rhode Island Currency Transmitter License on August 28, as indicated on NMLS. This license is essential for performing services involving digital assets on behalf of users.

Van de Poppe shared with CCN that the potential addition of crypto payments to X’s platform might open the door for Dogecoin’s inclusion.

“As we all know, Shiba Inu and Pepecoin are moving in tandem with Dogecoin as the correlations are super high between the meme coins. In that regard, I think the future might be positive for SHIB, especially combined with Shibarium if it’s actually going to drive Twitter adoption and be something,” he asserted.

“If it’s another meme and the product doesn’t work, then I’m expecting it to slowly die down as that always happens with new technology,” Van de Poppe commented.

He agrees, though, that in terms of ‘significance,’ “Shibarium holds substantial importance.”

“It’s been hyped a lot prior to the actual event, so it’s the cornerstone of the success of Shiba Inu at this stage. If it starts to get traction and people start to use the Layer 1 solution (network effect comes into play), that’s the moment that you’d be seeing substantial growth on the prices as well. If there’s literally no adoption going to be taken into account, then I’m sure it will die,“ he concluded.

Predicting 2030 is a challenge, yet Shiba Inu and its community ardently drive value growth. Seen in Metaverse Land auctions and key payment partnerships.

Optimism persists for global economic recovery this year or the next, pivotal for coins like Shiba Inu.

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