Shiba Inu Stuck in Bear Market: Price Drops Over 71% from Yearly Highs

Shiba Inu (SHIB) is currently experiencing a deep bear market, having fallen by over 71% from its highest level this year. As of Tuesday, Sept. 17, Shiba Inu was trading at $0.000013, with third-party data indicating a noticeable decline in demand.

Low Trading Volume

According to recent data, SHIB’s 24-hour trading volume was just $177 million. In comparison, other cryptocurrencies like Pepe (PEPE) and Dogwifhat (WIF) had significantly higher volumes at $747 million and $290 million, respectively. Additionally, smaller tokens such as Baby Doge Coin and Neiro saw volumes of $205 million and $364 million.

Decline in Futures Market Interest

Shiba Inu’s open interest in the futures market has also dwindled. It currently stands at $24 million, a significant drop from the year-to-date high of $137 million. This decline highlights the reduced investor interest in SHIB futures.

Changes in the Meme Coin Industry

The meme coin industry has seen significant changes over the past 12 months, impacting Shiba Inu’s price action. Notably, the launch of Pump.fun and SunPump has simplified the process for developers to launch their own meme coins. These platforms have seen considerable success, with Pump.fun meme coins accumulating a market cap of over $500 million and SunPump tokens reaching a valuation of over $514 million.

Token Burns and Ecosystem Growth

Despite continued token burns, Shiba Inu’s price has lagged. According to recent data, the burn rate jumped by 440% to over 28.2 million coins in the last 24 hours, bringing the total number of burned coins to over 410 trillion. While token burns theoretically reduce supply and can positively impact price, Shiba Inu’s ecosystem has struggled to grow.

Data from DeFi Llama reveals that Shibarium, Shiba Inu’s Layer 2 network, has attracted just $1.17 million in assets, while ShibaSwap holds $15.64 million. This weak ecosystem growth likely contributes to SHIB’s underperformance.

Technical Analysis and Price Patterns

Shiba Inu has formed several concerning patterns in its price chart. In July, SHIB experienced a death cross when the 200-day and 50-day moving averages crossed bearishly, leading to a price drop of over 30%. Additionally, SHIB has formed a descending triangle pattern, with the lower side at $0.0000126. This pattern is typically considered highly bearish.

“There is a risk that the token will experience a bearish breakout as the triangle nears its confluence.”

If such a breakout occurs, SHIB could drop to the next key support level at $0.000010, its lowest swing on Aug. 5, which represents a 20% decline from its current level.

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