Maxwell Ledger
Jun 30, 2024Why Shiba Inu’s Fall to $0.000020 May Be Inevitable
Shiba Inu (SHIB) has seen a notable drop in its market price, currently trading at $0.000024. Despite a 103% hike in volume, indicating active trading, the token has depreciated by over 4.8% in the last 24 hours. This scenario highlights a significant selling pressure that could further drive SHIB’s price downward. The market cap is outpacing transaction volume, suggesting that SHIB might not be at a good discount price yet.
Exchange Inflows and Outflows
A crucial metric to consider is the exchange flows. Data from Santiment shows that exchange outflows, indicating tokens moving out from exchanges, were 510.97 million. This usually suggests holders are not looking to sell soon. However, the exchange inflows, which measure tokens sent to exchanges, were more than double at 1.69 billion. This indicates that many participants are willing to sell their SHIB tokens, contributing to the selling pressure.
Network Value to Transaction (NVT) Ratio
The NVT ratio for Shiba Inu is currently 91.56, indicating a relatively high network value compared to its transaction volume. A high NVT ratio typically suggests that the network value is high while investor sentiment is bearish. Historically, an increase in the NVT ratio has coincided with falling prices, further supporting the possibility of SHIB’s decline to $0.000020.
Resistance Levels and Sell Walls
Analyzing the In/Out of the Money indicator, which examines the profitability of addresses at current price levels, shows that a large cluster of addresses purchased SHIB between $0.000024 and $0.000025. These addresses, now at a loss, could create a resistance level as they might sell if SHIB’s price attempts to rise, leading to a potential pullback. This resistance at $0.000025 makes it difficult for SHIB to sustain a price rally.
Broader Market Influences
The broader cryptocurrency market trends also significantly impact SHIB’s performance. For instance, Bitcoin’s price movements often influence the entire crypto market. If Bitcoin’s price rebounds, it could invalidate SHIB’s bearish prediction. Conversely, continued market volatility and regulatory uncertainties could further negatively impact SHIB’s price.
Potential for a Price Decline
Given the current metrics and market conditions, SHIB’s price is likely to decline to $0.000022 and, under highly bearish conditions, could plummet to $0.000020. This potential decline is driven by the high selling pressure, bearish investor sentiment, and significant resistance levels.
Future Predictions and Strategic Considerations
Investors should closely monitor SHIB’s exchange inflows and outflows, NVT ratio, and broader market trends. Strategic entry and exit points, diversification, and risk management strategies are crucial for navigating the volatile market conditions. Staying updated on regulatory changes and technological developments within the Shiba Inu ecosystem can provide valuable insights for making informed investment decisions.
Conclusion
Shiba Inu faces significant challenges, with potential for further price decline to $0.000020. The current selling pressure, high NVT ratio, and resistance levels contribute to this bearish outlook. Investors should remain vigilant, conduct thorough research, and strategically manage their investments to navigate the complexities of the cryptocurrency market. By staying informed and adaptable, they can potentially capitalize on the opportunities presented by Shiba Inu’s evolving market conditions.
