Shiba Inu, known as the “Dogecoin killer,” is currently embroiled in a technical battle, with bears exerting downward pressure on its price while bulls hold onto a glimmer of hope. Analysts are closely examining the chart patterns and on-chain data of this meme coin in order to predict its next move.
Descending Triangle Formation
Recently, a descending triangle formation has emerged on SHIB’s 3-day chart. This particular pattern typically indicates a potential price drop as the asset’s price becomes squeezed between approaching support and resistance lines. As a result, SHIB holders are now faced with a crucial question: Will the price break below the support level and continue its downtrend, or will it defy gravity and initiate an upward trend by breaking above the triangle?
It’s worth noting some recent data that points to 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 shrinkage in the user base and a possible decline in transaction volume, which could exert downward pressure on the price. These recent developments have raised concerns about SHIB’s future performance.
New Investors Reluctant about SHIB
New investors who have joined the SHIB party are experiencing a drop in morale due to significant declines. 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 intensify selling pressure.
Another worrisome 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 suggests that the asset is overvalued and could incentivize current holders to realize profits, thereby increasing selling pressure.
However, despite the downward trend, there is a glimmer of hope for SHIB. The overall sentiment surrounding the coin has recently shifted positively, indicating an improvement in market perception. This newfound optimism could challenge the impact of the descending trend and signal the potential for a price breakout.
Can Rising Sentiment Boost SHIB’s Value Potential?
If the positive momentum continues, analysts predict a potential increase in SHIB’s value, with the possibility of reaching a price level of $0.00003. This new level could 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 witness a decline of approximately 15%, potentially dropping to $0.000018. This gives SHIB investors more reason to be concerned, as it highlights the potential effects of the ongoing downtrend.
Disclaimer:
The information provided in this article should not be considered as investment advice. Investors should be aware that cryptocurrencies are highly volatile and therefore carry risks, and they should conduct their own research.
