Leading meme coin Shiba Inu has seen a 10% price drop in the past 24 hours. The drop comes after a surge in profit-taking by traders, who pulled out a staggering $426 million on Tuesday, the largest single-day selloff since 2022.
As profit taking continues, the price decline of Shipp could extend. Here's why.
Shiba Inu sellers are selling coins for profit.
On January 7, the total realized profit/loss of the Shape Network (NPL) reached $426 million, marking the highest single-day value since February 2022.
The NPL of a coin measures the difference between the price at which the asset was last traded or sold and the current market price. It tells us how much profit or loss users are “making” on the network.
When an asset’s NPL rises significantly, it indicates that a large portion of the cryptocurrency held by investors is being sold at a profit. This sudden influx of selling pressure can put downward pressure on the asset’s price, especially when the market cannot absorb the increased supply.
Moreover, the Relative Strength Index (RSI) confirms this increase in selling pressure. At the time of publication, it is below the neutral 50 line at 41.96 and in a downtrend.
The RSI measures the overbought and oversold market conditions of an asset. It ranges from 0 to 100, with values above 70 indicating that the asset is overbought and could decline. On the other hand, values below 30 indicate that the asset is oversold and could see a recovery.
The RSI reading for Shipp at 41.96 indicates increased selling pressure, which is a sign of market weakness. If the RSI continues to decline towards 30, the meme coin price could decline further.
SHIB Price Prediction: More Drops Ahead
Shipp has been trading on the daily chart within a descending parallel channel for the past 30 days - a bearish pattern consisting of two downward-sloping parallel trend lines that point to consistently lower highs and lows. This indicates ongoing selling pressure. If Shipp remains in this pattern, its price could drop to $0.000018.
However, if the sell-off subsides and traders start accumulating meme coins, this bearish prediction will be invalidated. In this case, the price of Shipp may rise to $0.000025 and towards $0.000033.