Shiba Inu (SHIB) is now the 13th-largest cryptocurrency with its market valuation sitting near $18 billion, right behind its rival meme-cryptocurrency Dogecoin (DOGE), worth roughly $20 billion.
But despite falling behind in ranks, SHIB’s price has outperformed DOGE in 2022. February has seen a sharp recovery for the SHIB/DOGE pair, in particular, rising by over 38% month-to-date (MTD).
As a result, Shiba Inu gained more than 50% MTD against the United States dollar versus Dogecoin’s 11%, as shown in the chart below.
Most of February’s — and, in fact, 2022’s — gains in the SHIB market surfaced on two dates: Feb. 6 and 7. SHIB’s price rose by a net 41% led by back-to-back optimistic updates in the Shiba Inu market compared to DOGE’s 12.5% gain.
Welly’s adoption, burn party, other bullish catalysts
Shiba Inu’s rally in February primarily came in the wake of multiple bullish catalysts, including merchant adoption, a token burning event and the announcement of a layer-2 blockchain solution.
On Feb. 3, Welly’s, a fast-food chain selling burgers and french fries, announced a tie-up with Shiba Inu. In doing so, the firm decided to rebrand its stores to integrate Shiba Inu-themed products, including nonfungible tokens featuring their mascot dog’s imageries.
Welly’s customers will be able to buy their products using SHIB tokens while participating in their food chain’s expansion via Shiba Inu’s decentralized autonomous organization “Doggy DAO.” A day after the announcement, SHIB’s price rose by 7% to $0.00002219.
On Feb. 5, a day before the big Shiba Inu rally, crypto company Bigger Entertainment announced a massive “coin burn” involving SHIB tokens on Valentine’s Day, effectively removing 162 million SHIB from circulation.
On the same day, Singaporean blockchain solutions firm Unification, which has previously worked with Amazon and Google, announced that it had been engaging with the Shiba Inu creators to develop a layer-2 solution called Shibarium, optimized for gaming.
In contrast, Dogecoin’s ecosystem stayed far from hype-building scenarios and traded — more or less — in sync with broader crypto market trends. Its last big update came on Jan. 14 when billionaire entrepreneur Elon Musk announced that his electric vehicle manufacturing company, Tesla, would accept payments in DOGE.
DOGE rallied to as high as $0.2148 after the Tesla news on Jan. 14 but has since dropped to near $0.15.
Next Shiba Inu hype in focus: Metaverse
Unlike Dogecoin, Shiba Inu has been holding its recent gains. On Thursday, SHIB was trading merely 5% lower than its year-to-date high of $0.00003523 while eying a breakout above its interim resistance level of $0.00003331.
SHIB held its bullish bias as Shiba Inu creators announced on Wednesday that they would foray into the emerging metaverse sector. In doing so, they would enable users to buy plots of virtual lands. However, they did not disclose when they plan to launch the yet-to-be-named project.
The news also helped LEASH, a token that would enable users to purchase and auction lands inside the Shiba Inu metaverse, rally by 45% on Feb. 9. This also coincided with someone purchasing 3.4 trillion SHIB worth almost $116 million in a single sale.
But SHIB comes with its own set of risks. For starters, the token’s upside boom has done little in boosting its use case outside the cryptocurrency exchanges. For example, Cryptwerk, an online crypto directory, shows that only 618 merchants globally accept payments in SHIB. In comparison, more than 2,000 merchants have integrated DOGE into their checkout page.
Extreme price volatility also puts Shiba Inu at risk of facing massive pullbacks.
Related: Is Shiba Inu overheating after SHIB price gains 75% in two weeks?
SHIB’s recent history shows that it has corrected 80%–90% during its previous two bearish cycles. As the token now eyes a decisive close above $0.00003331 to ensure its long-term bullish bias, a pullback of equal proportion could have it wipe 40% of its recent gains, with the next downside target sitting near $0.00002091.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
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