Shiba Inu (SHIB) has run into a whirlwind of unusual activity that could spell unfavorable implications for its price. Recently, the price is nothing to write home about as it notes a 9.33% seven-day decrease.
However, a keen observation points to a further decline that the meme coin holders may not desire at this point. Why is this happening? Discover the details in this on-chain analysis.
Shiba Inu Buyers Cannot Absorb the Pressure
The major reason for this thesis is the surge in Shiba Inu’s 90-day dormant circulation. As the name suggests, dormant circulation shows the number of distinct tokens transacted on a given day even though they have not moved for a long period of time.
Oftentimes, spikes in dormant circulation bring SHIB’s price to a lower level. This is because a spike in transactions of previously idle tokens suggests that long-term holders are cashing out.
An increase in cash-out by long-term holders puts downward pressure on the price, as history reveals. Further, the chart below shows that dormant circulation was 47.46 billion on July 23, but as of this writing, it is 211.78 billion.
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An additional 150 million tokens entering circulation is bearish for SHIB, especially if the market’s buy orders cannot absorb the selling pressure.
A quick assessment of the order books shows that the token may not be able to resist the downturn. This is because there was an initial spike in exchange inflow.
Exchange inflow tracks the number of tokens sent from external sources (in most cases, cold wallets) to addresses on exchanges. When this figure jumps, token holders are prepared to sell.
However, a decrease indicates that participants are taking their assets off these platforms for long-term keeping, which is bullish for the price.
SHIB exchange inflow surpassed 1 trillion earlier in the day, suggesting that the token had faced intense selling pressure.
Currently, it is higher than what it has been in more than 30 days. If this remains the same, SHIB’s price may feel the impact, and a decrease may be inevitable.
SHIB Price Prediction: The Decline Continues
At press time, SHIB’s price is $0.000017. Like the on-chain aspect explained above, the technical perspective suggests that the meme coin price could decrease.
This is basically because of the EMA positions. EMA stands for Exponential Moving Average, a technical tool designed to measure price trends over a given period, which could be 20 days, 50 days, or even 200 days.
This analysis focuses on the 20 EMA (blue) and 50 EMA (yellow). According to the image below, SHIB’s price is below the 20 and 50 EMAs. This indicates a bearish trend, as trading above the indicators will have suggested a bullish bias.
Read More: Shiba Inu (SHIB) Price Prediction 2024/2025/2030
If this lingers, SHIB could find it challenging to jump. Additionally, the Fibonacci Retracement indicator gives likely price targets that SHIB may reach. From the chart above, the token can drop to $0.000016 if it fails to rise above the short-term EMAs.
But if it breaks past the shorter one, the next move could see the cryptocurrency hit $0.000019. Breaching the longer EMA may also invalidate this thesis, and SHIB may rise to $0.000021.
Disclaimer
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