Shiba Inu's BONE Surges Over 200% In Volume But Price Slumps

The trading volume of Shiba Inu's governance token BONE surprisingly soared to 205%, but its price plummeted, leading many holders to speculate what is happening.

BONE was among the top gainers in August when it reached the $2 mark and set an early year high of $2.39 on Aug. 30. Interestingly, after reaching the peak price, the governance token's price plummeted, and with bulls unable to sustain beyond the $1.63 mark when September ended, it led to further price decline.

But why is the trading volume high? An increase in the asset's trading volume is usually linked to the asset's high volatility since seasoned trades buy and sell in massive amounts to take profits. Comparably, the increase in BONE's trading volume could be attributed to investors buying the crypto asset at its lows to gain more when its price eventually spikes.

In other words, traders are accumulating, taking advantage of the current opportunity presented by BONE's low price, which was created by price volatility. However, industry watchers think that the total number of tokens that changed hands between sellers and buyers, or the trading volume, should not be taken as gospel truth since it is considered an unreliable indicator of investment positioning.

It is worth noting that the exact reason for the BONE's price dump is unknown, but many think that it could be the uncertainty surrounding the launch of the layer-2 solution Shibarium. It may be recalled that Shiba Inu lead developer Shytoshi Kusama previously said that BONE will be used for gas fees in the upgraded blockchain.

Because of this, investors took interest in the governance token and tried to accumulate it as early as possible. Unification, the team overseeing the blockchain's development, said in mid-September that the project's Public Beta testnet could roll out in Q3 2022 or "sometime thereafter."

However, it is already way past Q3 2022 and six days into October, but the community has not heard anything specific about the Public Beta testnet launch or documentation release window from Unification and Shiba Inu dev. As of 4:01 a.m. ET, BONE was trading down 0.99% at $1.17 with a 24-hour volume of $8,860,653, according to the latest data from CoinMarketCap.