Shiba Inu [SHIB], currently the second-largest memecoin based on market capitalization, has witnessed a decline of around 30% in its value over the past month. The coin failed to maintain the range it had established since early January, and as of now, its downward trend persists.
As of the time of writing, indicators suggest that breaching the $0.00002 resistance level will be crucial for any bullish momentum. While SHIB bulls are facing strong headwinds, the overall market sentiment remains bearish.
The Solution to Shiba Inu’s Challenges
The descent below the 61.8% Fibonacci retracement level in mid-December acted as the catalyst for the ongoing downtrend. Despite the frenzy surrounding memecoins in November, the mini-altseason came to an end by December.
On January 31st, the $0.00002 zone, previously a bullish order block from September, was tested as resistance. Since then, SHIB has declined by an additional 23%. Nevertheless, there was a slightly positive signal from the Chaikin Money Flow (CMF), with a reading of +0.02 at the moment, following a period in late January when it remained below -0.05.
The uptick in the CMF could indicate a slowdown in capital outflows from the market, although it has not yet turned distinctly bullish.
Additionally, the Visible Range Volume Profile emphasized the significance of the $0.00002 level, serving as the lower boundary of the value area.
In the cryptocurrency realm, money tends to follow where attention is directed. Social volume has been decreasing since early December, coinciding with the fading enthusiasm for memecoins. The sustained decline led to the short-term MVRV dipping into negative territory.
Conversely, the Mean Coin Age has shown an upward trend over the past month. Together with the MVRV, it signaled a buying opportunity – heightened accumulation while short-term holders continued to experience losses.
From a technical standpoint, a revisit of $0.0000128 could present a buying window. Alternatively, a scenario where the $0.00002 level transitions into support could reignite optimism among the bulls.
Disclaimer: The views expressed are personal opinions and should not be considered as financial or investment advice.