Shiba Inu (SHIB) has seen a significant retreat, dropping to $0.000022, which is 33% below its monthly high. While it showed a 3.5% increase on Saturday, the overall trend remains concerning. The decline is primarily due to the general softness and decreasing volumes in the cryptocurrency market. Additionally, Shiba Inu’s fundamentals have weakened in recent days.
Shibarium, its layer-2 network, is not expanding as rapidly as before. On Friday, only 44 new accounts were added, a far cry from the 3,400 on Dec. 4. The cumulative number of accounts has reached 222,000, but the active ones have dropped below 3,000.
Shibarium’s average transaction fees have been falling since peaking at 0.0004 earlier this month. Its total value locked has also decreased to $3.55 million from over $6 million on Dec. 7. This is crucial because Shibarium fees in the form of BONE are typically converted to SHIB and burned. However, the burn rate has crashed by over 98% in the last 24 hours to 507,123 SHIB, resulting in a circulating supply of 584 trillion tokens, well below the total supply of over 999 trillion.
The daily chart indicates that SHIB’s price has dropped sharply after reaching $0.000033 in December and is now slightly below the 50-day moving average. There are signs of a bearish pennant pattern, suggesting further downside potential. On the bright side, Shiba Inu remains above the ascending trendline connecting the lowest swings since August, having resisted dropping below it at least six times. But if it falls below this support, it could lead to a more significant decline, potentially reaching its Oct. 25 low of $0.00001590.
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