A key metric for the Shiba Inu cryptocurrency’s Shibarium network has recently flashed bullish signals, suggesting the meme coin could be primed for a price rally.
Specifically, the number of new verified contracts on Shibarium, Shiba Inu’s Ethereum Layer 2 scaling solution, spiked over 530% on Monday. This reached one of the highest single-day levels ever recorded on the young network.
The contract spike indicates that more developers are choosing to build decentralized apps and services on top of Shibarium. As more protocols launch, usage and activity on the network tends to increase. This additional demand for transactions can drive up the price of Shiba Inu, as it’s the governance token of the ecosystem.
However, some caution is warranted before declaring a major rally is imminent. Despite the encouraging contract figures, overall adoption of Shibarium has remained relatively low since its launch this summer. Key metrics like active users, transactions, and total value locked in DeFi have declined from their peak levels.
So while the contract spike is a positive development, significantly more traction is likely needed before it directly translates into an upside for Shib Inu’s price. The meme coin has also been trending below its 50-day and 100-day moving averages recently, typical bearish technical indicators.
Still, if the crypto market enters another broad bull phase, the increased developer interest marked by the contract spike could provide the catalyst Shib Inu needs. The moving average levels could act as a launchpad for the next rally. So the contract figures offer some reason for tempered optimism for Shiba Inu holders after a difficult 2022. But major gains likely hinge on growing the ecosystem.
