Harsh September for Shiba Inu Coin: Why is the Meme Coin Crashing Hard?
Shiba Inu (SHIB), the popular meme-themed cryptocurrency, has seen a 44% drop in its price over the past 90 days. This trend raises concerns that Shiba Inu may face further declines, potentially trapping it in the poor performance known as "September Decline."
On-chain analyses published on BeinCrypto explore the potential for additional drops and their impact on SHIB holders. đ
Shiba Inu Indicators Point to Weak Recovery Potential
An evaluation of Shiba Inu's price performance reveals that the last time the coin recorded monthly gains was in May. Since June, the situation has changed, with some market participants indicating that the broader market may be in a bearish phase.
Despite some holders hoping for better performance this month, the Network Value to Transactions (NVT) ratio suggests that the odds are slim. Additionally, historical data from the 2021 bull market shows that September was typically a quiet or bearish month for SHIB.
The NVT ratio measures how quickly the market value of a cryptocurrency is growing compared to the transaction volume on its network. If the transaction volume is higher than the market value, it may indicate that the cryptocurrency is undervalued.
For SHIB, the NVT ratio has suddenly increased, indicating that the market value is growing faster than the value being transacted on the network. This suggests that investors may be overvaluing SHIB as a high-yield asset. However, this could lead to an unsustainable bubble, resulting in another price decline.
Additionally, the net flow of large SHIB holders has decreased by 163% over the past seven days. This indicator measures the difference between the amount bought and sold by addresses holding more than 1% of the circulating supply of the coin.
Typically, a rise in the net flow indicator suggests that more SHIB is being bought than sold, which can lead to a price increase. However, for SHIB, the opposite is happening.
Currently, 44% of SHIB holders are facing losses. If this trend continues, the coin may face a sharper correction, potentially pushing 50% of its holders into the red.đ
SHIB Price Forecast: Deeper Decline Ahead
On the daily chart, SHIB bulls appear to be in a position to prevent further declines, aiming to maintain support at $0.000012. However, the technical setup remains bearish, indicating that defending this area may be challenging.
Additionally, the Chaikin Money Flow (CMF) indicator for SHIB has entered negative territory. A high CMF indicates more accumulation, but a decline, as in SHIB's case, suggests increased distribution, meaning more coins are being sold than bought.
The current SHIB price is $0.000013, trading below the 20-day (blue) and 50-day (yellow) exponential moving averages. Trading below these moving averages is a bearish signal, indicating that SHIB may continue to decline if these trends persist.
If the situation remains unchanged, SHIB's price could drop to $0.000010 by the end of September. On the other hand, to achieve a bullish reversal, buyers would need to push the price above the 20-day exponential moving average. If successful, SHIB could retest the 38.2% Fibonacci level, potentially driving the price to $0.000017 and even $0.000020.
