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Shiba Inu (SHIB) faces potential downward pressure as recent network activity indicates dwindling interest among investors and traders.
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The active user base has diminished significantly, with the number of active addresses plummeting to historic lows, suggesting reduced transactional engagement.
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According to COINOTAG, “When liquidity diminishes, the potential for bear pressure increases, leading to price declines.”
Shiba Inu’s network stagnation signals potential for a price drop as active accounts and transactions dwindle, risking a shift in market sentiment.
Analyzing the Recent Price Trend of Shiba Inu (SHIB)
Shiba Inu’s recent price movements reveal a significant break from its previously established ascending trendline. This trendline, which had formed a strong support zone between $0.00001095 and $0.00003315, has now fallen to the $0.00001160 mark, possibly indicating a bearish shift. Market analysts predict that SHIB could revisit its Q1 2024 low of $0.00000837 if current downward momentum persists.
Technical Indicators Reflect Bearish Sentiment
The recent behavior of the MACD (Moving Average Convergence Divergence) provides further insight into the prevailing market conditions. Currently, the MACD line at -0.00000110 sits below the signal line at -0.00000102, with the histogram at -0.00000008. These figures highlight a bearish momentum, suggesting that, without a significant reversal, further declines are likely.
Source: TradingView
Should the MACD line move upward, surpassing +0.00000100, there might be a chance for a reversal. However, bear sentiment may dominate if the MACD dips further to -0.00000200. In addition, an increase in panic selling could occur if SHIB falls to its previous low, making it susceptible to a further price decline. In contrast, any rebound from that level could see the price testing resistance at $0.00002100.
Impact of Declining On-Chain Activity on SHIB
Shiba Inu’s on-chain metrics reflect a concerning trend. The active addresses have significantly decreased from over 2,000 in mid-February to a mere 501, indicating a serious decline in user engagement and transactional volume.
This drop in network activity is detrimental as it erodes liquidity, leading to greater susceptibility to sell-offs. Without renewed interest or speculation regarding SHIB’s potential, bearish market conditions may become entrenched.
Source: Blockscout
The drastic decline from over 4.6 million new transactions to just 44,913 is alarming and signals a lack of confidence amongst potential investors. Such stagnation usually triggers a downward spiral where lower trading volumes further depress prices as enthusiasm wanes.
Source: Blockscout
In conclusion, the declining user engagement and network activity present formidable challenges for SHIB’s price maintaining upward momentum. If current trends do not reverse soon, the memecoin could find itself under significant bearish pressure, affecting not only investor sentiment but also price stability in the longer term.
Conclusion
In light of the ongoing decreases in both transaction volumes and active addresses, Shiba Inu is at a critical juncture. As market conditions evolve, traders and investors will need to keep a close watch on these indicators to navigate the changing landscape and make informed decisions about their positions in SHIB.
