Leading meme coin Shiba Inu (SHIB) has been caught in a descending parallel channel since July 23, shedding over 20% of its value.
On-chain data suggests that the altcoin could face additional bearish pressures, with waning demand pointing to a further downward move.
SHIB Faces Bearish Pressure as Investor Confidence and Demand Fade
Readings from the SHIB/USD one-day chart show that the meme coin has traded within a descending parallel channel since July 23, with its price falling by double digits during that period.
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This bearish pattern emerges when an asset’s price consistently makes lower highs and lower lows, creating two parallel trendlines that slope downward. It signals a sustained downtrend, driven by weakening investor confidence and low buying pressure.
On-chain data from Glassnode confirms the decline in new demand for the meme coin. According to the data provider, the number of unique addresses appearing for the first time in a SHIB transaction has dropped by 30% in the past two weeks.
This sustained drop in new user activity carries significant implications for SHIB’s short-to mid-term outlook. Without a steady influx of new participants, buying pressure dries up, making it difficult for the meme coin to escape its current downtrend.
In addition, SHIB’s Holder Retention Rate has plummeted. According to Glassnode, the retention rate fell to a two-month low of 96.096% yesterday, signaling a drop in the number of existing holders still maintaining their positions.
This metric measures the percentage of holders who retain their tokens over a given period. A high retention rate reflects strong faith in the asset’s future prospects, while a falling retention rate suggests increasing uncertainty or dissatisfaction among holders.
Therefore, SHIB’s falling Holder Retention Rate points to heightened selling pressure, as more investors exit their positions.
Can a Rally Push SHIB Back to $0.00001295?
At press time, the top meme coin trades at $0.00001252. With climbing sell-side strength, the altcoin risks testing support at $0.0000167. Should this price floor fail to hold, SHIB’s value could drop toward $0.00001004.
On the other hand, if new demand climbs and traders extend their holding time, SHIB could reverse its downward trend and rally to $0.00001295.
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