The Shiba Inu (SHIB) price rebound mission suffered a major setback this week after falling another 10% on Wednesday. As panicked investors drive coins away from the memecoin market, is SHIB ready for a more bearish outlook in the coming weeks?
Crypto investors have reallocated capital away from memecoins and altcoins in response to the recent spike in market volatility. The Shiba Inu (SHIB) price has been one of the hardest hit by this trend.
In addition to the 10% price correction, Shiba Inu struggled to attract new users this week. Is SHIB ready for more bearish play?
Shiba Inu losing market share
According to data presented by Santiis lying, SHIB has been struggling to attract new requests since this week. The Glassnode chart below illustrates that new addresses created on the Shiba Inu Network Growth have been declining since June 11.
In particular, between June 11 and June 14, it dropped by 133%, from 3,838 to 1,646 new wallet addresses.
Network Growth gauges the user acquisition rate of a blockchain network by adding up the new wallet addresses created daily. As observed above, this often has a negative impact on the price when Network growth persistent fall.
As the SEC crackdown rages on. Investors appear to be reallocating capital away from memecoins like SHIB towards Bitcoin and other more resilient mega-cap altcoins.
Unless this trend reverses, the ongoing SHIB downtrend may persist in the coming weeks.
The value of the Shiba Inu network is deteriorating
Moreover, the increasing ratio of Valuation of the network compared to transaction volumes suggests more bearish days ahead for SHIB price. Essentially, the NVT ratio compares a network’s market valuation to the trading volume involving its native token.
According to the Glassnodechart below, SHIB has been losing ground since June 10. Between June 10 and June 14, the SHIB NVT ratio climbed almost 550%, from 35.29 to 229.56.
Typically, strategic investors use the NVT ratio to gauge the relationship between a cryptocurrency’s market capitalization and the level of underlying transactional activity. When the NVT ratio increases, it indicates that the asset is currently overvalued.
Therefore, this 1600% increase in the NVT ratio adds credence to growing bearish concerns that SHIB could be due to a larger price retracement.
SHIB Price Prediction: A Reversal At $0.000005 Is On The Cards
According to IntoTheBlock’s In/out of the money around the price distribution data, over 90% of Shiba Inu owners are now in a net loss position. The overwhelming downtrend means that SHIB will likely enter another decline towards $0.000005 in the coming weeks.
Currently, 14,430 addresses that have purchased 930 billion SHIB tokens are expected to offer considerable support as the price approaches their breakeven point at the average $0.000006.
But, if this support breaks down as expected, the Shiba Inu price will likely drop to $0.000005.
Still, the bulls can negate this bearish narrative if SHIB price breaks above $0.000007. However, as seen above, some of the 20,000 addresses holding 8.07 trillion tokens in this price range could pose significant resistance.
But if this resistance level does not hold, Shiba Inu bulls may remount the rally towards $0.000013.
In accordance with Trust Project guidelines, this price analysis article is provided for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to providing accurate and unbiased reports, but market conditions are subject to change without notice. Always do your own research and consult a professional before making financial decisions.