Shiba Inu token (CRYPTO: SHIB) on Wednesday, was one of the tokens accounting for the highest transaction fees.

What Happened: According to Santiment, an on-chain analytics platform, three key factors have contributed to the newfound optimism surrounding SHIB.

1. Network Growth Signals Robust Investor Engagement

Contrary to the prevailing market sentiments, the Santiment analysis highlights a notable increase in SHIB network growth. This indicates growing engagement and interest from investors, defying the notion that SHIB was limited to a speculative frenzy.

2. Unrealized Losses Amplify Potential Upside

Santiment’s on-chain metrics reveal that the majority of SHIB investors are currently experiencing unrealized losses. While this might initially appear discouraging, it actually suggests a high potential for future gains. When sentiment eventually turns bullish, the release of these unrealized losses could amplify SHIB’s upside movement, attracting further attention from traders and investors.

3. Decreasing SHIB Supply on Exchanges

Further reinforcing its analysis, Santiment highlights a decrease in the supply of SHIB on exchanges. This reduction in available tokens suggests growing confidence among SHIB holders who are increasingly opting to hold onto their positions rather than selling them off. As supply dwindles, a potential supply-demand imbalance may work in favor of SHIB, potentially leading to price appreciation.

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Why It Matters: Following a surge in trading volume on June 30, both Shiba Inu and Dogecoin (CRYPTO: DOGE), have experienced a decline in volume. 

Shiba Inu specifically broke out of a falling channel pattern on Wednesday, a prediction that had been made by Benzinga two days prior. However, Shiba Inu’s volume has been steadily decreasing, and the prices have shown a slight decline, suggesting that it is currently undergoing a period of consolidation.

In technical analysis, volume refers to the total number of shares traded within a specific time frame. It is a crucial indicator used by technical traders to gauge the overall interest and sentiment surrounding a coin.

Price Action: At the time of writing, SHIB was trading at $0.000007519, down 2.75% in the last 24 hours, according to Benzinga Pro.

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