- SHIB’ s price broke the ascending trendline that had held its price action since the crash on 5 August
- Altcoin’s active accounts number per period dropped while the number of new transactions has been flat since mid-February
Shiba Inu’s [SHIB] price broke the ascending trendline that had held its price action since the 5 August crash. Owing to the same, the second largest memecoin now might be poised for more dips to perhaps to its Q1 2024 lows.
The uptrend line, which supported the price between $0.00001095 and $0.00003315, dipped to the press time $0.00001160-level. The $0.00000837-low from Q1 2024 remains a probable downside target.
The MACD line at -0.00000110, the signal line at -0.00000102, and the histogram at -0.00000008, all flashed bearish momentum. The MACD line remaining below the signal line confirmed the downtrend.
Source: TradingView
If the MACD line moves above the Signal line, towards +0.00000100 with the histogram crossing into the positive zone, it could indicate a potential for reversal.
Conversely, a bearish case would see the MACD line drop to -0.00000200, with the histogram shifting further to -0.00000015 and confirming ongoing bear pressure.
If Shiba Inu falls to its Q1 2024 lows of $0.00000837, panic selling might kick in, pushing the prics further down. On the contrary, a rebound from this level might push the price up to $0.00002100 to test the broken trendline, if purchasing interest improves.
How SHIB’s declining on-chain activity could affect price?
Shiba Inu also saw a fall in active addresses per period from over 2,000 in mid-February to a historic low of 501. The drop pointed to less user interest, shrinking transaction activity, and falling interest across the network.
SHIB could face bearish pressure when dwindling network utilization sucks speculation dry. When this occurs, liquidity goes exposing it to sell-offs. If SHIB is unable to generate new or inspire bullishness, bearishness would spread and push the price down in the short term.
Source: Blockscout
Furthermore, the precipitous fall from over 4.6 million to a mere 44,913 is an all-time low in number of new transactions.
Since trading volumes have been stagnant, demand among investors has declined. An update like that lowers liquidity and allows the price to drop more easily.
Source: Blockscout
A worse use case translates to smaller volumes being traded. This would mean SHIB is less desirable to investors and traders.
Such declining interest could lead to a hike in sell-offs because the owners become disillusioned. Without any new network usage or bullishness, SHIB’s price might go on falling.
