Shiba Inu Drops 24% in a Month, Faces 50% Crash Risk

Shiba Inu, a prominent meme token, has been experiencing a notable decline in its price over the past month, with a loss of more than 24% of its value. Currently trading at approximately $0.0000113, the token is at risk of a potential 50% crash if it breaches the support level at the lower trendline of a descending triangle pattern. This pattern, which has been forming over the past year, suggests that sell-side pressure has been increasing while buyers remain cautious.

The bearish momentum of Shiba Inu is further intensified by the 50-day Simple Moving Average (SMA) of $0.0000169, which is approximately 54% above the current price. For the short-term momentum to shift to bullish, the price needs to crossover above this SMA level. Additionally, the Relative Strength Index (RSI) reading of 39 indicates aggressive selling behavior, with buyers unwilling to purchase the dip despite the steady decline in price.

Despite a significant burn of 12 million SHIB tokens, investor confidence remains low. This lack of confidence is further exacerbated by the declining activity on the Shibarium layer two network, which has seen its Total Value Locked (TVL) decrease by nearly half within six weeks. The TVL has dropped from a swing high of $3.14 million to $1.89 million, indicating a significant reduction in network activity.

The Shiba Inu project, led by figures such as Shytoshi Kusama, has yet to provide direct comments on the present price dynamics. Rumored ecosystem slack and weak liquidity appear influential in the projected decline. A high-profile burn event did not notably impact the downturn, as market burn rates are reportedly "crashed to zero".

Market conditions and whale exits could exacerbate price falls. Volatility persists, urging investors to assess market conditions as investor exodus risks increase. Historical patterns indicate Shiba Inu and similar coins can decline substantially alongside Bitcoin fluctuations. The ongoing segment weakness and slow adoption of Shibarium-led initiatives contribute to the downside pressure.

Market observers suggest financial risks remain due to thin liquidity, with potential escalating effects on SHIB and related currencies if Bitcoin sees further movements. Historical data stresses the need for utility growth to offset sentiment-driven price volatility.