Shiba Inu (SHIB) price is now down 23% over the last 7 days as the community grapples with FUD surrounding the Shibarium L2 launch. On-chain data explores the possibility of a SHIB price breakout in the coming days.
The much-anticipated Shibarium L2 network launch on August 16 has been fraught with technical bridging problems. Furthermore, a popular Shiba Inu executive, Lucie Shib, also warned against potential exploitation risks.
In effect, SHIB holders have scaled back transactional activity over the past week. Can the SHIB price break out of the downtrend in the coming days?
Shiba Inu Holders Have Scaled Back Transactional Activity
Shiba Inu holders have reduced their transactional activity over the past week. As depicted below, SHIB Transaction Count had crossed 16,500 on August 12, pushing the price to a 4-month peak of $0.000011.
But in contrast, only 5,601 transactions were recorded on August 21, representing a 66% drop in network activity over the past week.
This drop in network activity seems to have been fuelled by the recent Shibarium FUD and an industry-wide downturn in the crypto market.
Transaction Count estimates the level of economic activity happening on a blockchain network by tracking the daily number of confirmed transactions. A drop in network activity typically means that the underlying native token is being less utilized.
Unsurprisingly, a double-digit price decline has followed the 66% percent drop in the SHIB Transaction Count.
However, after a week-long sell-off, trading activity across exchanges now suggests an impending momentum swing.
Strategic Crypto Traders are Piling Up Orders
Interestingly, recent trading activity across exchanges shows that Shiba Inu bulls have continued piling up purchase orders in hopes of a bullish reversal.
The bulls have placed active orders to buy 1.9 trillion SHIB, a 400 billion increase from 1.5 trillion SHIB orders placed last week. Meanwhile, the volume of sell orders has remained rooted at 1.2 trillion SHIB tokens
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The Exchange On-chain Market Depth chart shows the real-time price distribution of active orders placed across recognized crypto exchanges.
The “Buy/Ask” wall is towering above the “Sell/Bid” side by a staggering 700 billion SHIB tokens. This shows that while investors may wait for the ongoing FUD to clear, there is no shortage of market demand for SHIB.
After resolving the initial issues surrounding the Shibarium L2 network, SHIB could build momentum to reclaim $0.000011 again.
SHIB Price Prediction: Consolidation Before Breakout
Drawing inferences from the data points outlined above, Shiba Inu will likely consolidate around $0.000008 before another SHIB price breakout.
The In/Out of Money Around Price (IOMAP) data, which shows the purchase price distribution of current Shiba Inu holders, also validates this prediction.
As seen in the chart below, 118,980 holders had bought 64.03 trillion SHIB at the average price of $0.000008. The bulls could attempt a rebound from that range if they continue to pile on buy orders.
However, if the slowing network activity persists, the bulls could still mount another significant buy-wall around $0.000006.
In contrast, the bullish traders could spearhead an early recovery rally toward $0.000011. But in that case, the 355,230 holders had bought 273.8 trillion SHIB at the average price of $0.000011 could trigger a bearish reversal.
However, if the team resolves the Shibarium L2 issues promptly, SHIB could build momentum for another rally toward $0.000014.
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