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Shiba Inu price has remained relatively stable in the past few months. Technical analysis suggests a strong bearish breakout, as the two lines of the descending triangle pattern approach their confluence.
SHIB price was trading at $0.00001262, down 62% from its highest point in November of last year. It may be on the cusp of a significant move in the coming weeks as the Shibarium ecosystem undergoes a decline.
Shiba Inu Price Could be at Risk of a Crash
Technical indicators suggest that the Shiba Inu price may be poised for a significant move. It is likely to be on the downside. The daily timeframe chart shows that the coin has formed a descending triangle pattern whose two lines are nearing their confluence.
This pattern consists of two lines: a horizontal and a diagonal one. In this case, the horizontal one is at $0.00001148, its lowest level in September and August this year. SHIB price is also slightly above its lowest level in April and June.
Assets often face sharp bearish breakouts when triangle lines converge. That confluence is occurring now, signaling potential downside pressure.
If this happens, the next initial target for the coin is at the year-to-date low of $0.000010. It is about 22% below the current level. A move below that support level will indicate further downside in the near term.
The bearish Shiba Inu price forecast will become invalid if it moves above the upper side of the descending channel. If this breakout occurs, the first target is $0.00001596.
It corresponds to the July high. The next level to watch is $0.00001762, reached in May. These milestones mark key resistance zones ahead.
Shibarium Total Value Locked Has Plummeted After the Recent Hack
Shibarium, Shiba Inu’s layer-2 network, is facing major challenges. The recent hack on ShibaSwap, its largest dApp, has intensified concerns. This could trigger a sharp decline in the SHIB price.
According to DeFiLlama, the total value locked in the ecosystem has plummeted to $981,050. It was down from its peak of over $6 Million last December. ShibaSwap’s TVL has fallen by 47% in the last 30 days to $550,000.
Other dApps in the ecosystem, such as WoofSwap, ChewySwap, and DogSwap, have also shed assets in the past few months. The same weakness has happened in terms of the number of users in the network.
ShibariumStats reports a steep decline in active accounts on the network. The count has plunged from over 2,000 last month to fewer than 100 now. This plunge occurred after hackers successfully drained some funds from the network in September.
The team managed to stop some of the funds. However, there are signs that many ShibaSwap users are avoiding the network. Shibarium’s activity drop is hurting the Shiba Inu price.
Fewer network fees mean less BONE converted to SHIB for burning, reducing deflationary pressure. This likely explains why the burn rate has plunged in the past few weeks.
Whale Buying and Falling Exchange Reserves are Bullish Catalysts
SHIB price has numerous bearish catalysts, including the fading activity in Shibarium and the formation of a descending triangle pattern.
However, there are signs that whale and smart money investors believe that it will bounce back in the near term. This explains why they are on a buying spree.
Whale investors hold 92.9 billion Shiba Inu coins, a 55% monthly increase. Similarly, smart investors have increased their positions in SHIB over the past few weeks. They now hold 13.45 billion tokens, representing an 88% increase over the last 30 days.
The ongoing accumulation of whale and smart money has coincided with a decline in exchange reserves. This is a bullish sign.
There are 283 billion tokens on exchanges, the lowest level they have been in months. Therefore, these on-chain metrics may help boost its price this month.
