The price of Shiba Inu (SHIB) has continued to decline significantly as the crypto fear and greed index turned red for the first time this year. SHIB has fallen for three consecutive days, reaching a low of $0.00001271, the lowest level since March 1st. This marks a drop of nearly 70% from its highest point this year, underperforming major cryptocurrencies like Bitcoin and Ethereum.

Crypto Fear and Greed Index Falls

Shiba Inu’s price drop is occurring amid increasing fear in the cryptocurrency market. The crypto fear and greed index has fallen to 38, its lowest level since November last year. This is a notable decrease from its peak in the extreme greed zone, which was over 90.

Several factors both within and outside the cryptocurrency space are contributing to Shiba Inu’s decline. Within the crypto market, Bitcoin balances on exchanges have risen as various entities, including governments and Bitcoin mining companies, move coins to exchanges.

Additionally, spot Bitcoin ETFs are losing assets. Recent data indicates that the eleven funds collectively hold 865,947 coins valued at almost $50 billion. On July 4, nine ETFs decreased by 609 BTC (approximately $35 million), and Grayscale decreased by 535 BTC (around $30.7 million), currently holding 274,724 BTC (valued at $15.76 billion).

Economic Indicators Impact

Further contributing to the decline is speculation that the Federal Reserve may maintain higher interest rates for longer than previously expected. This follows relatively strong inflation and non-farm payrolls (NFP) data. The economy added 206,000 jobs in June, surpassing the consensus estimate of 191,000 jobs.

Weak Fundamentals of Shiba Inu

Shiba Inu’s price has also been affected by weak fundamentals. Recent data shows that demand for SHIB has decreased. On most days, its trading volume has been overtaken by newer meme coins like Pepe and Dogwifhat. For instance, on a recent Friday, Shiba Inu had a total volume of $500 million, while Pepe and Dogwifhat recorded $1.3 billion and $913 million, respectively.

Other meme coins, such as Floki and Bonk, are also experiencing higher volumes than SHIB. Additionally, the Shibarium network is not performing well. Data from DeFi Llama indicates that Shibarium’s total value locked (TVL) has dropped to $1.35 million from a year-to-date high of $4 million. All decentralized applications (dApps) in Shibarium, such as WoofSwap, ChewySwap, Marswap, and DogSwap, have seen their TVL decline by over 40% in the past 30 days.

Similarly, ShibaSwap’s assets have decreased to $18.4 million from almost $2 billion at their peak in 2021.

Technical Analysis: Potential Death Cross

From a technical perspective, Shiba Inu’s price chart indicates further potential weakness. The SHIB token is nearing a death cross pattern, where the 50-day and 200-day Exponential Moving Averages (EMA) cross each other. If this pattern occurs, it may increase the likelihood of the token falling to $0.0000085, its lowest point this year.

Stay updated with the latest developments and insights in the cryptocurrency market on Global Crypto News.

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