The recent drop in the price of Shiba Inu, a prominent cryptocurrency, has raised concerns among financial spectators and industry insiders. Shedding 30% of its price since its May peak, the currency is seemingly on a downward trend. This situation, further fuelled by the ongoing activeness of cryptocurrency whales, is warranting increased speculation. Observers and participants are now set to brace for a potential further sell-off on the horizon.
Shiba Inu Price Dip and Whale Activity Indications
The cryptocurrency, dubbed as SHIB in the trading world, experienced a steep fall from its earlier height of $0.00001757 to a current low of $0.00001260, reflecting its weakest performance since May 7th this year. The sizeable investor group known as whales – significant stakeholders who possess a large amount of currency – has continued to offload their SHIB holdings. This trend is an indication that these investors are bracing for more downturns in the near future.
Data Showing Significant Drops
According to the data sourced from Santiment, it is evident that investors who hold between 100 million to 1 billion tokens have witnessed their token count decrease from 19.5 trillion to 17.96 trillion in comparison to the same period last year. This sizeable drop in holdings doesn’t halt at large investors alone.
Those who hold between 1 million to 100 million tokens have also been making aggressive sales. Such activities have caused the percentage of stablecoin supply held by SHIB whales to slide to 52.4% from its earlier peak of 56% this month.
Furthermore, there is a conspicuous trend among these investors who appear to be capitulating and selling at a loss. The network realized profit/loss (NRPL) metric, which tracks profitability, has dropped drastically to negative 1.04 million and has stayed in the red for several consecutive days, demonstrating the daunting losses faced by investors.
Fundamental Shocks
The dip in SHIB price is attributed to weakening fundamentals, including a significant decline in Shiba Inu’s burn rate in recent weeks. This change has resulted in deteriorating investor sentiment. Data derived from ShibariumScan, a platform that monitors on-chain activity, also verified a significant reduction in on-chain activity.
The number of active accounts has dwindled from 1,045 on June 6 to a mere 172 presently. Simultaneously, transaction fees also dropped from 1,459 BONE on June 4 to 336 BONE on June 8. This lack of activity on Shibarium is seen as a bearish sign as fewer transactions are being converted into SHIB and burned.
Impact and Technical Analysis
The daily trading chart unveiled that SHIB had peaked at $0.00001757 on May 12 before plummeting to $0.00001250. A series of lower lows and lower highs being formed indicates the creation of a descending channel pattern.
This decelerating scenario has resulted in an on-chain pattern where SHIB dipped below the 50-day and 100-day moving averages, including the crucial pivot and reversal level of the Murrey Math Lines. This downward trending channel indicates a potential slide in the future, with crucial support standing at $0.00001043, its lowest in April, reflecting a 17.80% decline from current levels. Conversely, any upward tick above the 50-day moving average at $0.00001361 would defy the bearish scenario.
