The Declining Performance of Shiba Inu (SHIB) Memecoin
The Shiba Inu (SHIB) memecoin is currently experiencing a significant downturn, with its value plunging to $0.000020, marking the lowest price point since December 20. This decline is not merely a random fluctuation; rather, it is indicative of a troubling trend characterized by a series of risky formations on its trading chart. Investors should be acutely aware of the potential for a substantial bearish breakout that could further exacerbate losses.
Impending Danger: The Death Cross Formation
One of the most alarming signals for SHIB holders is the impending formation of a death cross. This technical analysis pattern occurs when the 50-day moving average crosses below the 200-day moving average, often signaling a strong bearish outlook. Currently, the gap between these two averages is narrowing, which raises red flags for potential investors. Historically, the last occurrence of this death cross on June 20, 2024, led to a dramatic price drop of 40%, plummeting from $0.000017 to $0.000010.
In contrast, SHIB did experience a recovery after a golden cross formation on October 20, which saw the price surge by 80%, reaching $0.00003340 in November. However, the recent trends suggest that investors should not rely on similar recoveries occurring in the near future. The technical indicators are predominantly bearish, and the market sentiment is shifting.
The Double-Top Pattern: A Bearish Signal
In addition to the death cross, SHIB has also formed a small double-top pattern, which is another bearish reversal signal. This pattern is characterized by two peaks at roughly the same price level, with the top of this formation located at $0.00002488 and the neckline at $0.00001970. Should the price of SHIB decline below the critical support level of $0.00001788, it could open the floodgates to further downside, potentially targeting the next support level at $0.00001192, identified through the Murray Math Lines.
Decline in Network Activity and SHIB Burn Rate
Compounding these technical challenges, Shiba Inu is also grappling with a decline in its network activity. Recent data from IntoTheBlock reveals a staggering 27.5% decrease in new addresses and a 25% drop in active addresses over the past week. This trend suggests that investors are increasingly diverting their funds toward newer Solana-based memecoins, such as Fartcoin and Official Trump, which are capturing market interest at the expense of SHIB.
Furthermore, the daily burn rate of SHIB has plummeted by nearly 94%. Only 656,468 SHIB tokens were burned on a recent Sunday, equating to a mere $15 in value. This decline in burn activity is closely tied to reduced engagement on Shibarium, SHIB’s layer-2 network. According to ShibariumScan data, the average transaction fee has decreased from 0.0003 BONE in November to a mere 0.0001 BONE, underscoring a lack of growth within the network and diminishing utility for SHIB holders.
Shiba Inu’s Position Among Memecoins Is Threatened
The trading volume of Shiba Inu has also been overshadowed by emerging memecoins, further highlighting its declining status in the market. While SHIB’s daily transaction volume languishes at around $160 million, newer projects like the Official Trump memecoin are making waves with a staggering volume of $4.56 billion. Additionally, other memecoins such as Pudgy Penguins and Fartcoin have surpassed SHIB, reporting volumes of $188 million and $226 million, respectively.
This shift in trading dynamics signal a broader trend where investors are increasingly gravitating toward newer, more promising projects, leaving older memecoins like SHIB in the dust. The combination of bearish technical indicators, declining network activity, and increasing competition from newer memecoins presents a daunting outlook for Shiba Inu. Investors must exercise caution and remain vigilant as the market evolves, ensuring they make informed decisions in this rapidly changing landscape.
