Shiba Inu Struggles as Memecoin Market Cap Drops 8%

Shiba Inu, a popular memecoin, has struggled to match the gains of Bitcoin over the past two weeks, indicating weaker demand and a bearish outlook. The memecoin market as a whole has seen limited bullish momentum, with the market cap decreasing from $59.6 billion a month ago to $54.72 billion at the time of writing. Shiba Inu has been trading within a range since March, with an attempted breakout in May failing to sustain momentum. The token returned to the range lows at $0.0000111, and the market structure remains firmly bearish.

Multiple challenges hinder SHIB's recovery. The range extends from $0.0000111 to $0.0000142, with mid-range resistance at $0.0000126. To shift the structure bullishly, the lower high at $0.0000136 must be breached. However, indicators such as trading volume and the On-Balance Volume (OBV) suggest a lack of sustained demand. The OBV has made a series of lower highs this year, indicating that sellers have been dominant. Without a significant increase in demand, Shiba Inu will struggle to break out of its current range.

On-chain distribution conditions further complicate SHIB's recovery. Shiba Inu’s Mean Coin Age has been declining since May, following three months of accumulation. This downtrend suggests increased token movement from long-term holders, a sign of distribution. The Market Value to Realized Value (MVRV) ratio shows that many holders are still deep in losses, and Age Consumed data revealed a spike in selling pressure during early June, which has since eased. These metrics collectively point to a bearish outlook for SHIB. However, at the time of writing, the price was sitting at a key demand zone near the range low, opening the door for a potential short-term rally.

A breakout above $0.0000136 would be the first signal of a recovery for Shiba Inu. Investors can wait for a swift Bitcoin rally and subsequent consolidation, which could set up the conditions for capital to flow into the memecoin sector. This could potentially provide the necessary demand to push SHIB above the critical resistance level. However, without sustained demand and a shift in market structure, the outlook for Shiba Inu remains bearish.