Shiba Inu price made a strong bearish breakout as the burn rate plunged, whale selling continued, and activity in Shibarium waned.
Summary
- Shiba Inu price continued its strong downtrend this week.
- The burn rate plunged by 86% in the last 24 hours.
- SHIB whales and smart money investors have dumped the token.
Shiba Inu (SHIB), the biggest meme coin in the Ethereum (ETH) network, has plunged by almost 50% from its year-to-date high. This retreat makes it one of the worst-performing tokens this year.
SHIB’s crash has coincided with its deteriorating fundamentals. For example, the number of tokens being removed from circulation has deteriorated this year. Its daily burn rate plunged by 85% on Tuesday to just 1.6 million tokens.
The other parts of Shiba Inu’s network are not doing well. For example, activity in Shibarium has largely dried up. For example, the number of new accounts entering the network daily dropped to less than 10. There are fewer than 400 active accounts in the network.
Shiba Inu’s developers created Shibarium and ShibaSwap in its attempt to pivot away from being just a meme coin. Once successful, Shiba Inu would burn its tokens.
SHIB has faced other major fundamental challenges. The most notable one is that large account holders, commonly known as whales, have not been actively buying the token.
Instead, they have reduced their holdings from 220 billion on October 11 to 107 billion today. Smart money investors have reduced their positioning by 23.5% in the last three months to 43.50 billion.
SHIB’s demand in the futures and spot market has also waned this year. The open interest in the futures market has dropped to a multi-month low of $67 million, down from the year-to-date high of over $600 million.
The falling open interest is a sign that it liquidity in the perpetual futures industry has slipped recently. It is also a sign that traders are reducing their leverage amid rising liquidations.
Shiba Inu price technical analysis
The daily timeframe chart shows that SHIB’s price has crashed over the past few days. It has moved below the lower side of the bearish pennant pattern that has been forming since Oct. 9.
Shiba Inu price has moved below the key support at $0.00001, the lower side of the descending triangle pattern. It has remained below the 50-day moving average.
Therefore, the most likely SHIB price forecast is bearish, with an initial target of $0.0000085, its lowest level this year. A move below that level will point to more downside this year.
