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Shiba Inu’s Price in a Bear Market: Key Indicators to Watch
The Shiba Inu price continues to struggle, with the second-largest meme coin in crypto experiencing a 65% decline from its November peak. This downward trend is not unique to Shiba Inu, as other meme coins such as Dogecoin have also seen significant losses over the past 30 days.
Declining Burn Rate and Underperforming Shibarium
Shiba Inu’s burn rate has also taken a hit, with an 88% decline in the burn rate over the last 24 hours, according to Shibburn data. This decline in burn rate is a concerning indicator, as a lower burn rate can lead to increased supply and downward pressure on the price.
Additionally, Shibarium, Shiba Inu’s Layer 2 network, is underperforming. While the total completed transactions are nearing 900 million, the number of network addresses has stagnated at 2.1 million. This stagnation, combined with declining fees collected on the network and total value locked in its decentralized finance ecosystem, raises concerns about the long-term viability of Shibarium.
Declining Futures Open Interest and TVL
Shiba Inu’s futures open interest has declined in recent weeks, indicating weaker demand. Open interest has fallen to $182 million, down from its year-to-date high of $542 million. This decline in open interest, combined with a 30% decline in the TVL of major platforms within the ecosystem, suggests that investors are losing interest in Shiba Inu.
Death Cross Pattern and Bearish Pennant
The daily chart shows that SHIB has formed a death cross pattern, where the 50-day and 200-day weighted moving averages have crossed. This bearish pattern is often a precursor to further downside. The last time this pattern appeared in June last year, SHIB fell by over 40%.
Additionally, Shiba Inu has formed a small bearish pennant pattern. As a result, the coin may drop to the next key level at $0.00001162, its lowest point this week. A decline below that level would indicate further downside, with the next target at $0.00008480, its lowest level in January 2024, representing a 45% drop from the current price.
Investors should be cautious when considering investing in Shiba Inu, as the current indicators suggest further downside.
Tips for investors:
- Monitor Shiba Inu’s burn rate and Shibarium’s performance for potential signs of recovery.
- Keep an eye on futures open interest and TVL for indicators of investor sentiment.
- Be cautious of bearish patterns, such as the death cross and bearish pennant.
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