Key Takeaways
- Shiba Inu’s price is down significantly from its yearly high, and activity on its associated network, Shibarium, suggests further declines may be ahead.
- The total value locked (TVL) on Shibarium has fallen dramatically, indicating reduced confidence and participation.
- Fewer users are actively engaging with the Shibarium network, with daily active accounts dropping to very low numbers.
- Technical indicators suggest a continued downward trend for Shiba Inu’s price.
The Shiba Inu (SHIB) token is currently trading near the significant $0.00010 level, a considerable drop from its year-to-date peak of $0.00001765 and last November’s high of $0.0000334.
This decline in SHIB’s value mirrors trends seen in other popular meme coins on platforms like Ethereum and Solana, such as PEPE. For instance, the collective market capitalization of all Solana-based meme coins has shrunk from $22 billion in January to $7 billion.
Shibarium’s Declining Performance
A key factor contributing to SHIB’s downturn appears to be the underperformance of Shibarium, a layer-2 scaling solution developed by the Shiba Inu ecosystem. Shibarium was designed to enhance the utility of SHIB and facilitate token burns, thereby impacting its supply and potentially its value.
Transactions on Shibarium are processed using the BONE token. Fees generated from these transactions are converted into SHIB and subsequently burned, aiming to reduce inflation and improve SHIB’s tokenomics.
However, data indicates that Shibarium has struggled to gain traction within the layer-2 sector. The total value locked (TVL) on its network has fallen below $1 million, with substantial losses occurring in the aftermath of a recent ShibaSwap hack.
User Activity on Shibarium
The number of active users on the Shibarium network has dwindled significantly. According to statistics from ShibariumScan, the count of active accounts on the network plummeted to a mere 243 on October 22nd. On a subsequent Wednesday, only two new accounts were registered, and transaction volumes dropped to approximately 2,300.
This low activity translates into minimal revenue generation for Shibarium. On October 22nd, the network generated transaction fees equivalent to just $11.
Technical Analysis of Shiba Inu Price
A review of the daily chart for SHIB reveals a consistent downtrend over the past several days. The token is trading below the critical $0.00001163 mark, which represented its lowest point in August and September.
Furthermore, Shiba Inu’s price has fallen below both the 50-day and 200-day Exponential Moving Averages (EMAs). It has also dropped below the Supertrend indicator, accompanied by a continuous decline in the Relative Strength Index (RSI).
Based on these technical indicators, the token is likely to experience further downward movement, with bearish sentiment targeting the year-to-date low of $0.000006957. This bearish outlook would be invalidated if SHIB manages to reclaim and sustain a price above the key resistance level of $0.00001163.
Expert Summary
The current market conditions and on-chain data for Shiba Inu and its associated Shibarium network suggest a potentially challenging period ahead. The price of SHIB has seen a notable decrease from its yearly highs, coinciding with a sharp decline in Shibarium’s total value locked and user activity. Technical analysis further supports a bearish short-term outlook for the token.