Shiba Inu Coin price remained under pressure this week as key metrics eased. SHIB token dropped to $0.00000787, down sharply from the year-to-date high of $0.000010. This article explains why the SHIB token may rebound soon despite having weak fundamentals.
Shiba Inu Coin Price Technical Analysis
The daily timeframe chart shows that the SHIB price peaked at $0.000010 on January 5 and then pared back some of those gains to the current $0.0000078, a crash that mirrored the performance of other tokens.
On the positive side, the Shiba Inu price has retested the upper side of the falling wedge pattern that started to form in 2023. This pattern consists of two descending, converging trendlines and is one of the most common bullish reversal signs in technical analysis.
Retesting that level is important, as it signals a break-and-retest pattern that typically confirms a bullish breakout. Additionally, the token has formed a similar falling wedge in the past few weeks.
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Therefore, the most likely scenario is where the SHIB token rebounds and possibly hits the important resistance level at $0.0000010. A move above that level will signal further gains, potentially to the key resistance level at $0.00001485, its highest level on September 13.
The alternative scenario is that the break-and-retest pattern fails and the token continues to fall, potentially to the key support level at $0.0000068, its lowest level this year.
SHIB price chart | Source: TradingView
Key Shiba Inu Metrics Have Deteriorated
The bullish SHIB price prediction is based on technicals as its key metrics have deteriorated in the past few days.
For example, there are signs that Shibarium has become a failed project as its usage and assets have plunged. Data compiled by DeFi Llama shows that the total value locked in the layer-2 network has dropped by 50% in the last 30 days to $728,180. This number makes it one of the smallest layer-2 networks in the crypto industry.
Shibarium has just 18 DeFi protocols in its ecosystem, a figure that has not grown in years. Also, the number of transactions and fees the network makes has been in a strong downward trend in the past few months.
Shibarium’s success would have benefited SHIB price because the idea was for the BONE fees in the network to be converted into SHIB tokens and burned.
Meanwhile, the daily Shiba Inu burn rate has continued to fall over the past few months. It dropped by 45% in the last 24 hours to 7.6 million tokens, currently valued at just $60. A rising burn rate should, in theory, boost the SHIB price by reducing its inflation rate.
Additionally, Shiba Inu’s demand has crashed as the 24-hour volume dropped to just $80 million, a tiny figure for a cryptocurrency with over $4.6 billion in market capitalization. Its futures open interest has also plunged in the past few weeks.
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