Shiba Inu price has transitioned from one of the most popular meme coins to a fallen angel. The SHIB token was trading at $0.00001013 on Wednesday, down 70% from its November high and 78% from its 2024 highs. This price has also dropped by over 88% from the all-time high.
Shiba Inu price plunge has mirrored that of other meme coins
One reason why the Shiba Inu price has crashed is that the hype surrounding meme coins has faded in the past few months.
A closer look at most meme coins shows that they have all dropped sharply from their all-time highs. Pepe, the second-biggest Ethereum meme coin, has crashed and shed over $7.1 billion in value from its highest point in November.
Other top meme coins like Official Trump, Pudgy Penguins, Bonk, and Floki have all plunged by double digits from their highest levels this year.
The ongoing Shiba Inu price crash happened as demand for altcoins dropped, with most investors focusing on Bitcoin, Ethereum, and XRP.
Data compiled by CoinMarketCap shows that the Altcoin Season Index (ASI) has dropped to 26. At the same time, the Bitcoin dominance has continued rising in the past few months.
Shibarium woes have continued
The other main reason why Shiba Inu price has crashed is that its attempts to transition from a meme coin to a utility token has largely failed.
One of these attempts was the formation of Shibarium, a layer-2 network in 2023. This transition has not worked out well as Shibarium has not gained any market share in the industry.
Data compiled by DeFi Llama shows that it has attracted just 18 developers since it inception. The total value locked (TVL) in the network has crashed to $878,000, a sign that it has become a ghost chain.
Shibarium has no market share in the stablecoin industry as no token has deployed in it so far. It has been overtaken by some of the newest layer-2 networks like Plasma, Base, Arbitrum, and Linea.
Shibarium’s woes accelerated recently when ShibaSwap, its most popular dApp was hacked. This hack pushed the developers to pause a key bridge, which largely halted activity in the network.
The ongoing Shibarium implosion means that it is not contributing towards the incineration of Shiba Inu tokens as some of the fees made in the network are converted into SHIB and then burned.
Whales and smart money investors have dumped SHIB tokens
The other main reason why the Shiba Inu price has crashed is that whale investors have continued to dump it this year.
Data compiled by Nansen shows that whales have been dumping their SHIB tokens aggressively in the past few months. They have reduced their holdings to their lowest level in months.
The same has happened among smart money investors, who have continued dumping their tokens. This is a sign that these investors anticipate that the coin will continue falling in the near term.
At the same time, demand for Shiba Inu tokens has plunged, with the daily volume in the spot and futures market being significantly smaller than other tokens.
SHIB price technicals have contributed to the crash
The daily timeframe chart shows that Shiba Inu price has crashed because of its weak technicals. It has constantly remained below the 50-day and 100-day Exponential Moving Averages (EMA) a sign that bears have remained in control.
Shiba Inu Coin price has also formed a descending triangle pattern, which often leads to more downside. It also remains below the Ichimoku cloud indicator and is now forming a bearish flag pattern.
Therefore, the token will likely continue falling, with the next key support level being at $0.000006946, its lowest level this month. A break below that level will point to more downside.
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