The memecoin ranking second in terms of market capitalization, Shiba Inu [SHIB], has experienced a decline of almost 30% in its value in the last month. It failed to maintain the range set in early January and currently, the downward trend persists.
As of the time of writing, volume indicators suggest that breaking through the $0.00002 resistance level is crucial for any bullish developments. Despite the strong bearish momentum against SHIB, overall market sentiment remains quite weak.
Solution for Shiba Inu’s Challenges
The breach below the 61.8% Fibonacci retracement level in mid-December initiated the downtrend. The memecoins saw huge growth in November, but by December, their brief altseason had concluded.
The $0.00002 zone, which served as a bullish support level in September, was tested as resistance on January 31st. Subsequently, SHIB witnessed a 23% drop on the charts. Nevertheless, the CMF indicator hinted at a glimmer of hope, with a reading of +0.02 at the moment, having stayed below -0.05 for much of January’s latter half.
The CMF’s upward movement could indicate a slowdown in capital outflows from the market, although it is not convincingly bullish just yet.
Additionally, the Visible Range Volume Profile emphasized the significance of the $0.00002 threshold by forming the lower boundary of the value area.
Typically, in the cryptocurrency market, money tends to follow where attention is directed. Since early December, social media discussions have been dwindling as the hype around memecoins began to fade. The continuous losses caused the short-term MVRV to enter negative territory.
Conversely, Mean Coin Age has been on the rise over the past month. Along with the MVRV, it indicated a buying opportunity – highlighting increased accumulation while short-term holders were encountering losses.
Based on technical analysis, a retest of $0.0000128 could present a buying window. Alternatively, if the $0.00002 level transitions into support, it might provide some optimism for the bulls.
Disclaimer: The insights shared do not constitute financial, investment, trading, or any other form of advice, and are purely the author’s personal perspective.