The Shiba Inu (SHIB) price has faced a significant decline of 10% since hitting the local high of $0.0000012 on April 15. However, on-chain data suggest that the bears are not done yet. In this article, we will delve into recent developments and analyze how much further SHIB price could decline.
Shiba Inu Ecosystem Faces Challenges
Despite a flurry of product launches and partnerships, Shiba Inu, the market capitalization’s 2nd largest meme coin, has struggled to acquire new users. This development could adversely affect SHIB price performance in the coming weeks.
Shiba Inu Network Growth Decline
Over the past two weeks, Shiba Inu has encountered difficulty in attracting new network participants. According to data compiled by Santiment, Shiba Inu Network growth has reduced by 30%, from 1,624 on April 16 to 1,147 at the close of April 25. Network Growth measures the number of new wallet addresses created on a blockchain. A persistent decrease indicates that the underlying token could struggle to find new demand, resulting in bearish momentum. Therefore, the SHIB price could enter a prolonged downswing in the coming days.
SHIB Appears Overvalued at Current Prices
Looking at the Network Value to Transaction Volume (NVT) ratio on the Shiba Inu network, SHIB appears to be overbought at current prices. The NVT ratio tracks the valuation of a blockchain network in relation to its transactional activity. It is calculated by dividing the total market capitalization by daily transaction volume. Between April 16 and April 26, the SHIB NVT ratio surged by more than 400%, from 141.16 to 772.57.
A high NVT ratio indicates that the market capitalization of the cryptocurrency is not supported by its underlying transactional activity. This bearish signal suggests that the SHIB may currently be overvalued and due for a further price correction.
SHIB Price Prediction: Reversal to $0.000008 is on the Cards
According to IntoTheBlock’s Break-Even Price distribution data, Shiba Inu bears will likely force a downsizing to $0.000008. Currently, the 36,000 addresses that bought 10.64 trillion SHIB tokens are expected to offer considerable support when the price approaches its break-even zone at $0.000010. However, if that support folds, then the Shiba Inu price will likely decline toward $0.000008.
At this support level, bullish pressure from another cohort of break-even 252,000 addresses holding 60 trillion tokens could prevent a further slump. The bulls can negate this pessimistic narrative if SHIB price can rise beyond $0.000010. But as seen above, some of the 36,000 addresses holding 10.64 trillion tokens at that price range could pose some resistance. If that resistance level fails to hold, the Shiba Inu bulls can ride the rally towards $0.000016.
Conclusion
In conclusion, recent on-chain data indicates that the Shiba Inu (SHIB) price could continue to decline in the near future. The decline in network growth, coupled with SHIB’s overvaluation, suggests that the bears may still have room to run. However, the support levels mentioned above could prevent a further decline, and the bulls can negate the downtrend if SHIB price surpasses $0.000010. As always, investors should exercise caution and perform their own due diligence before making any investment decisions.
