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Once more, investors are directing their funds towards meme-centric cryptocurrency Shiba Inu (SHIB), serving as a cautionary signal for Bitcoin (BTC) traders.

The open interest in Binance's SHIB futures has experienced a remarkable surge, surpassing $101.65 million this month. This marks the highest level since February 5th, as reported by the data provider Coinglass. These SHIB futures contracts are structured with a size of 1,000 SHIB per contract, and traders can utilize leverage of up to 25 times.

The market capitalization of SHIB has surged by almost 32% to reach $6.58 billion, driven by positive sentiment surrounding an upcoming layer-2 launch. This development is expected to aid the cryptocurrency in moving away from its meme-coin classification.

A surge in open interest combined with a growth in market capitalization indicates a flow of fresh capital into the SHIB market. This trend has historically foreshadowed vulnerabilities in Bitcoin, the foremost cryptocurrency in terms of market value.

Increased inflows into SHIB futures tend to occur at interim bitcoin price tops. (Coinglass)

 

SHIB's open interest has crossed the threshold of $100 million on at least seven occasions since its creation. The preceding six instances correlated with peaks in the local Bitcoin price.

The observed trend aligns with the patterns typically observed in conventional markets, where significant increases in meme stocks compared to defensive investments are interpreted as a signal opposing the overall market direction. Throughout the SHIB rally this month, Bitcoin, the predominant cryptocurrency in terms of market value, has maintained a steady and unvaried position around the $30,000 mark, as indicated by CoinCryptoUs data.

While past performance can offer insights, it's crucial to note that it doesn't guarantee future outcomes. Several analysts anticipate a resurgence in the upward trajectory of bitcoin, though.