The self-described “Dogecoin killer,” Shiba Inu (SHIB), has been trapped in a technical tug-of-war as bears try to drive it down and bulls hang on hints of hope. Examining the memecoin’s chart pattern and on-chain data, analysts are trying to figure out its next action.
Descending Triangle Looms: Will SHIB Fall Or Fly?
SHIB’s 3-day chart shows a falling triangle development. Usually indicating a possible price drop, this trend sees the pinched between lines of convergence of support and resistance. The main concern for SHIB holders is whether the price will defy gravity and break out from the triangle, therefore generating an uptrend, or if it will break below support and keep its decline.
Falling Demand Raises Concerns For Shiba Inu
Fueling the negative fire, SHIB has seen demand fall noticeably. According to data from Santiment, during the past month the for SHIB have dropped by more than half. This points to a declining user base and maybe less trading volume, thereby exerting downward pressure on the price.
Source: Santiment
New Investors Give SHIB The Cold Shoulder
The sudden drop in new addresses joining the SHIB party further lowers mood. On-chain statistics show that daily new address creation for trading SHIB has dropped 51% in the same period. This dearth of new blood joining the market can aggravate the selling pressure.
Shiba Inu is currently trading at $0.000024. Chart:
SHIB’s High Valuation: A Recipe For Sell-Off?
The ratio of SHIB adds more reason for worry. The average acquisition price of all SHIB tokens is compared with the present market price in this indicator At right now, SHIB’s MVRV ratio is a high 38%. A high ratio indicates that the asset may be overpriced, hence existing owners should cash in on their gains and help to cause a sell-off.
A Silver Lining?
Though the general bearish attitude exists, SHIB shows some hope flickering. The coin’s weighted sentiment has lately shockingly become positive, suggesting a change in market impression. This fresh hope can show itself as a price breakout, bucking the bearish connotations of the declining triangle.
Related Reading: Bitcoin Update: $120 Million Futures Liquidated As Price Takes A Beating
Can Bullish Sentiment Propel SHIB To Higher Ground?
Analysts estimate a possible price explosion for SHIB, hitting $0.00003, should the favorable attitude remain. For investors who have seen a recent price fall, this would be a pleasant variation.
Featured image from Pexels, chart from TradingView