Shiba Inu, known as the “Dogecoin killer,” is currently engaged in a technical battle, as bears attempt to push the price down while bulls hold onto hope. Analysts are closely studying the meme coin’s chart patterns and on-chain data in order to predict its next move.
Descending Triangle Formation
A descending triangle formation has recently emerged on SHIB’s 3-day chart. This particular pattern typically suggests a potential price drop as the asset’s price becomes squeezed between approaching support and resistance lines. Therefore, SHIB holders are faced with the crucial question of whether the price will break below the support level and continue its downward trend, or defy expectations and initiate an upward trend by breaking above the triangle.
It is worth noting recent data that points to SHIB’s downward trend. For instance, data from Santiment reveals that the number of daily active SHIB addresses dropped by over 50% last month. This indicates a decrease in the user base and a potential decline in transaction volume, which could exert downward pressure on the price. These recent developments may raise concerns about SHIB’s future performance.
New Investors Hesitant About SHIB
New investors who have joined the SHIB party are experiencing a loss of morale due to significant declines. According to chain data, the number of new SHIB wallet addresses created daily has decreased by 51%. This situation raises concerns that the lack of fresh capital entering the market could increase selling pressure.
Another concerning 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 is approximately 38%. This high ratio suggests that the asset is overvalued and could motivate current holders to take profits, thereby increasing selling pressure.
Despite the downward trend, there is a glimmer of hope for SHIB. The overall sentiment surrounding the coin has recently turned positive, indicating an improvement in market perception. This newfound optimism could challenge the effects of the descending trend, signaling potential for a price breakout.
Could Rising Sentiment Boost SHIB’s Value Potential?
If the positive momentum continues, analysts predict a potential increase in SHIB’s value, with a possible price level of $0.00003. This 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 potentially decline by about 15%, bringing it down to $0.000018. This gives SHIB investors more reason to be concerned, as it highlights the potential impact of the ongoing downtrend.
Disclaimer:
The information provided in this article should not be considered investment advice. Investors should be aware that cryptocurrencies are highly volatile and carry a significant level of risk, and should therefore conduct their own research.
