Shiba Inu, known as the “Dogecoin killer,” is currently engaged in a technical battle, as bears push the price down while bulls hold onto hope. Analysts are closely examining the chart patterns and on-chain data of this meme coin to predict its next move.
Formation of Descending Triangle
Recently, a descending triangle formation has emerged on SHIB’s 3-day chart. This pattern typically suggests a potential price drop as the asset’s price becomes squeezed between approaching support and resistance lines. Therefore, SHIB holders face a crucial question: will the price break below the support level and continue the downtrend, or defy expectations and initiate an upward trend by breaking above the triangle?
It is worth noting some recent data that indicates SHIB’s downward trend. For instance, data from Santiment reveals that the number of daily active SHIB addresses decreased by over 50% last month. This suggests a contraction in the user base and a potential decrease in transaction volume, which could exert downward pressure on the price. These recent developments raise concerns about SHIB’s future performance.
New Investors are Cautious About SHIB
New investors who have joined the SHIB party are experiencing a decline in morale due to significant drops in price. According to chain data, there has been a 51% decrease in the number of new SHIB wallet addresses created daily. This situation raises concerns that the lack of fresh capital entering the market could increase selling pressure.
Another worrying factor is SHIB’s Market Value to Realized Value (MVRV) ratio. This metric compares the current market price to the average purchase price of all SHIB tokens. Currently, SHIB’s MVRV ratio stands at around 38%. This high ratio indicates that the asset is overvalued and could encourage current holders to realize profits, thereby increasing selling pressure.
However, despite the downward trend, there is a glimmer of hope for SHIB. The coin’s overall sentiment has recently shifted positively, suggesting an improvement in market perception. This newfound optimism could challenge the effects of the descending trend, indicating the potential for a price breakout.
Can Rising Sentiment Boost SHIB’s Value?
If the positive momentum continues, analysts anticipate a potential increase in SHIB’s value, possibly reaching a price level of $0.00003. This new level would be a welcome development for investors who have recently experienced price drops.
However, considering factors such as Fibonacci correction levels and bearish pressure, SHIB’s price could see a decline of approximately 15%, potentially dropping to $0.000018. This gives SHIB investors more reason to worry, as it highlights the potential effects of the ongoing downtrend.
Disclaimer:
The information provided in this article should not be construed as investment advice. Investors should be aware that cryptocurrencies are highly volatile and carry inherent risks. It is recommended to conduct thorough research before making any investment decisions.