Shiba Inu (SHIB) price rebound mission has suffered a major setback this week after another 10% drop on Wednesday. With panicking investors moving coins away from the memecoin market, is SHIB set for a more bearish outlook in the coming weeks?
Crypto investors have been reallocating capital away from memecoins and altcoins in response to the recent uptick in market volatility. Shiba Inu (SHIB) price has been one of the worst hit by this trend.
In addition to the 10% price correction, Shiba Inu has struggled to attract new users this week. Is SHIB set for a more bearish play?
Shiba Inu is Losing Market Share
According to the data presented by Santiment, SHIB has been struggling to attract new demand since this week. The Glassnode chart below illustrates that new addresses created on the Shiba Inu Network Growth have been in a decline since June 11.
Particularly, between June 11 and June 14, it dropped 133% from 3,838 to 1,646 new wallet addresses.
Network Growth evaluates the user acquisition rate of a blockchain network by summing up the new wallet addresses created daily. As observed above, it often impacts price negatively when Network Growth drops persistently.
As the SEC crackdown rages on. Investors appear to be reallocating capital away from memecoins like SHIB towards Bitcoin and other more resilient mega-cap altcoins.
Unless this trend reverses, the ongoing SHIB bearish trend may linger in the coming weeks.
Shiba Inu Network Value is Deteriorating
Furthermore, the rising ratio of Network Valuation to Transaction Volumes suggests more bearish days ahead for the SHIB price. Essentially, the NVT ratio compares a network’s market valuation to how much the volume of transactions involving its native token.
According to the Glassnodechart below, SHIB has been losing traction since June 10. Between June 10 and June 14, the SHIB NVT ratio soared nearly 550% from 35.29 to 229.56.
Generally, strategic investors use the NVT ratio to assess the relationship between a cryptocurrency’s market capitalization and the level of underlying transactional activity. When the NVT ratio rises, it indicates that the asset is currently overvalued.
Hence, this 1600% surge in NVT ratio adds credence to the growing bearish concerns that SHIB could be due for more price retracement.
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SHIB Price Prediction: A Reversal to $0.000005 is on the Cards
According to IntoTheBlock’s In/Out of the Money Around Price distribution data, over 90% of Shiba Inu holders are now in a net-loss position. The overwhelming bearish trend means that SHIB will likely enter another downswing toward $0.000005 in the coming weeks.
Currently, 14,430 addresses that bought 930 billion SHIB tokens are expected to offer considerable support when the price approaches their break-even zone at $0.000006 mid-range.
But, if that support folds as expected, the Shiba Inu price will likely decline to $0.000005.
Still, the bulls can negate this bearish narrative if SHIB price rises above $0.000007. However, as seen above, some of the 20,000 addresses holding 8.07 trillion tokens at that price range could pose significant resistance.
But if that resistance level does not hold, the Shiba Inu bulls can ride the rally toward $0.000013.
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