Shiba Inu coin price has moved sideways in the past few weeks and created a death cross pattern pointing to further downside ahead. The SHIB token dropped to $0.000016, down by over 50% from its highest level in December. So, what next for Shiba Inu as the burn rate falls and Shibariun network slows?
Shiba inu price forms death cross
The SHIB token risks more downside after forming a death cross pattern on the daily chart. This pattern forms when the 200-day and 50-day moving averages cross each other, and is often a sign that bears are in control. In this case, this cross has happened on the weighted MA, which is a popular average because it focuses on the recent data.
Shiba Inu has also formed a head and shoulders pattern. This is another popular reversal sign that has a head, two shoulders, and a neckline. An H&S pattern often leads to a strong bearish breakdown over time.
SHIB price has moved to the weak, stop & reverse point of the Murrey Math Lines tool. It has also dropped below the Ichimoku cloud indicator.
Therefore, there is a risk that the coin will have a strong bearish breakdown in the coming weeks. If this happens, the next point to watch will be at $0.0000115, the ultimate support of the MML. A move below that level risks the price dropping to the oversold level at $0.000010.
The bearish view will become invalid if the Shiba Inu price rises above the psychological level at $0.000020, the 200-day WMA point.
Shiba Inu has weak fundamentals
Third-party data shows that Shiba Inu has some weak fundamentals that may push its price lower in the coming weeks. Coinglass data reveals that the futures open interest has dropped to $200 million from last year’s high of over $540 million. That is a sign that the coin has weak demand in the futures market.
Shiba Inu is also seeing weak volume in the spot market. CoinGecko data shows that its 24-hour volume was over $198 million, much lower than Dogecoin’s $1.24 billion. Pepe and Official Trump had a volume of over $778 million and $935 million, respectively. That is a sign that the token is having weak demand from investors.
Further data shows that the SHIB burn rate has crashed by over 80% in the past 24 hours. Only 3.3 million SHIB tokens were incinerated during that time.
A token burn is often compared with a share repurchase in that it reduces the number of coins in circulation, boosting their value. In Shiba Inu’s case, the network has burned over 410 trillion tokens over time, leaving those in circulation at 589 trillion.
Meanwhile, there are signs that the Shibarium layer-2 network is not doing well. The total value locked (TVL) in the ecosystem has crashed below $3 million, making it a smaller chain than other popular layer-2 networks like Base and Arbitrum. ShibaSwap, a key part in its ecosystem is also highly tiny.
While Shibarium has handled over 921 million transactions, the total addresses has stagnated at 2.1 million. Also, the amount of fees collected by the network has plunged, meaning that its impact on Shiba Inu’s burn rate.
Therefore, there is a risk that the SHIB price may continue falling in the coming weeks because of its relatively weak fundamentals and technicals.
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