During the recent crypto market crash, memecoins like Shiba Inu [SHIB] have not been immune to the downtrend. SHIB has witnessed a significant drop over the past day.
Currently, SHIB has slumped to a four-month low of $0.0000116. However, there has been a slight recovery since reaching this low point.
As of now, Shiba Inu is being traded at $0.0000141, showcasing a 19.91% decline in daily charts. On a weekly and monthly basis, the memecoin has seen decreases of 20.21% and 42.19%, respectively.
The recent market conditions beg the question: what are the factors behind this downward trend?
Reasons Behind Shiba Inu’s Decline Today
As per an analysis by CryptoCrypto, SHIB has hit a four-month low due to a shift in investor sentiment towards bearishness, leading to panic selling.
Many traders have been offloading their assets to prevent further losses, minimizing their risks. Profitable traders have been closing their positions to secure their gains.
The trend of traders closing their positions has been accompanied by a decline in Futures Open Interest (OI) to a historic low.
Coinglass data reveals a 41.64% decrease in Shiba Inu’s Futures OI, currently standing at $165.51 million. This drop reflects a lack of trust among investors in the market.
In addition, SHIB holders have experienced substantial liquidations with some being forced out of their positions and others choosing to exit on their own terms.
Notably, over $7.2 million worth of long positions have been liquidated.
The selling pressure is evident in the diminishing Relative Strength Index (RSI), which has plummeted from 39 to an oversold level of 24 in the last three days. This decline indicates a dominance of sellers in the market.
Moreover, the recent surge in Trading Volume indicates an increase in sell orders within the market.
This selling pressure is further validated by a negative CMF, dropping to -0.11.
Lastly, bearish sentiments have gripped the market as SHIB holders exhibit bearish tendencies across major exchanges.
Shiba Inu’s Funding Rate is now negative, with the Aggregated Funding Rate at -0.0207 and the Predicted Aggregated Funding Rate at -0.0202.
This suggests that bears are likely to continue influencing the market trends.
Future Prospects for SHIB
To summarize, Shiba Inu has witnessed extensive panic selling amid a bearish market outlook. With increasing liquidations and selling pressure, a further decline could be on the horizon.
If the current conditions persist, SHIB may drop to $0.000012. In the event of a breach, the next support level could be at $0.00001088.
Alternatively, a potential recovery could see SHIB aiming to reclaim $0.000016 and potentially target $0.00001780.