Shiba Inu (SHIB) price is down 10% since it hit a local high of $0.0000012 on April 15. But the on-chain data suggests that the bears are not done yet. How low will the SHIB price go?
The Shiba Inu ecosystem has faced challenges in recent weeks. Despite a series of product launches and partnerships, the second largest meme currency in market capitalization has struggled to gain new users. Could this hurt SHIB’s price performance in the coming weeks?
The Shiba Inu network’s growth experienced a sharp decline
Over the past two weeks, the Shiba Inu has struggled to attract new entrants to the network. According to data collected by Santiment, the Shiba Inu network’s growth decreased by 30%, from 1,624 on April 16 to 1,147 at the end of April 25.
Network growth typically measures the number of new wallet addresses created on the blockchain. And when it drops steadily, as noted above, it indicates that the underlying token may be having difficulty finding new demand to help dissipate the bearish momentum.
As a result, SHIB price could enter a prolonged downtrend in the coming days.
SHIB appears to be overvalued at current prices
Looking at the ratio of network value to transaction volume (NVT) on the Shiba Inu network, SHIB appears to be overbought around current prices. The NVT ratio tracks the valuation of a blockchain network in relation to its transaction activity. It is calculated by dividing the total market capitalization by the daily transaction volume.
The chart below shows that between April 16th and April 26th, the SHIB NVT ratio increased by more than 400%, from 141.16 to 772.57.
A high NVT ratio indicates that the cryptocurrency’s market cap is not supported by underlying transaction activity. This bearish signal indicates that the price of SHIB may be overvalued currently and as a result of a further price correction.
SHIB Price Prediction: Reversal to $0.000008 is on the cards
According to IntoTheBlock’s Break-Even Price Distribution data, the Shiba Inu bears are likely to force a volume cut to $0.000008.
Currently, the 36,000 addresses that bought 10.64 trillion SHIB tokens are expected to provide significant support when the price approaches the $0.000010 breakeven region.
However, this support is easing as expected, and Shiba Inu price is likely to decline towards $0.000008. However, at this support level, bullish pressure from another batch of 252,000 break-even addresses containing 60 trillion tokens could prevent further declines.
However, the bulls can negate this pessimistic narrative if the SHIB price can rally beyond $0.000010. But as we saw above, some of the 36,000 addresses with 10.64 trillion tokens in this price range could form some resistance.
But if this resistance level fails to hold, the Shiba Inu bulls can ride higher towards $0.000016.
In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions.