Shiba Inu (SHIB) in Critical State: What’s Happening?

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Arman Shirinyan

Cryp­to Mar­ket Review: Shi­ba Inu is grad­u­al­ly los­ing its place on market

Con­tents

Shi­ba Inu (SHIB) now finds itself in a pre­car­i­ous sit­u­a­tion as it has dropped below the cru­cial $0.000009 sup­port lev­el, trad­ing in the $0.000008 price range. This drop in val­ue can be con­sid­ered dan­ger­ous for the token as it may deter poten­tial investors and exac­er­bate an already unfa­vor­able mar­ket situation.

Over the past two months, SHIB has exhib­it­ed lack­lus­ter mar­ket per­for­mance, with its price los­ing approx­i­mate­ly 26% of its val­ue. The token’s inabil­i­ty to main­tain its sup­port lev­el is a con­cern­ing sign for investors, who may now be ques­tion­ing the long-term prospects of their holdings.

Shiba Inu chart
Source: Trad­ingView

The declin­ing price of SHIB could lead to a neg­a­tive feed­back loop, with investors sell­ing their posi­tions to mit­i­gate poten­tial loss­es. This, in turn, could dri­ve the price even low­er, mak­ing it increas­ing­ly chal­leng­ing for SHIB to regain its for­mer mar­ket position.

The mar­ket dynam­ics of SHIB high­light the inher­ent risks asso­ci­at­ed with invest­ing in meme coins. Shi­ba Inu was the PEPE of 2021, bring­ing enor­mous gains to ear­ly investors. Unfor­tu­nate­ly, the ral­ly was short-lived and quick­ly turned into a dis­as­ter for any­one who entered SHIB around the ATH.

Pepe’s poor state

The meme token Pepe (PEPE) has expe­ri­enced a mas­sive crash, los­ing more than 50% of its val­ue after sev­er­al whales, includ­ing some linked to the token’s devel­op­ers, decid­ed to cash out their hold­ings. The sud­den sell-off has caused pan­ic among PEPE hold­ers, lead­ing to a domi­no effect of sell­ing activ­i­ty with­out regard for prof­it or loss.

Over the last 10 days, PEPE saw a stag­ger­ing 1,000% price increase, which attract­ed a sig­nif­i­cant num­ber of retail investors. The mete­oric rise of this meme token gen­er­at­ed con­sid­er­able hype and spec­u­la­tion, lur­ing investors with the promise of quick and sub­stan­tial gains. How­ev­er, the recent crash has left many with sub­stan­tial loss­es as they scram­ble to exit their positions.

The sell-off appears to be indis­crim­i­nate, with no clear pat­tern in terms of prof­its or loss­es, reflect­ing the pan­ic that has gripped the PEPE mar­ket. This sit­u­a­tion high­lights the inher­ent risks asso­ci­at­ed with invest­ing in high­ly spec­u­la­tive assets, such as meme coins, which are often sub­ject to extreme price volatil­i­ty and mar­ket manipulation.

The sud­den col­lapse of PEPE’s val­ue con­firms the long-term unvi­a­bil­i­ty of such tokens and their inabil­i­ty to show sta­ble mar­ket per­for­mance. It also serves as a warn­ing for those con­sid­er­ing enter­ing the meme coin mar­ket, empha­siz­ing the need for prop­er research and due dili­gence before invest­ing in any cryp­tocur­ren­cy, espe­cial­ly those with lim­it­ed use cas­es and ques­tion­able fundamentals.

Ethereum stronger than ever

Despite recent tur­bu­lence in the meme coin sec­tor, Ethereum has man­aged to main­tain a strong posi­tion on the mar­ket in terms of price per­for­mance. The sec­ond largest cryp­tocur­ren­cy by mar­ket cap­i­tal­iza­tion has shown remark­able resilience in the face of a mas­sive sell-off from Ethereum Foun­da­tion wal­lets and its co-founder, Vita­lik Buterin.

Cur­rent­ly trad­ing at $1,855, Ethereum has man­aged to avoid a crit­i­cal sell-off and now sits com­fort­ably at the 50-day mov­ing aver­age, which may serve as a guide­line for its poten­tial uptrend. The dig­i­tal asset has man­aged to bounce back from a recent dip, where it briefly touched the $2,100 price threshold.

Ethereum’s price may face resis­tance at the $2,000 lev­el, and a suc­cess­ful break above this point could sig­nal fur­ther upward momen­tum. How­ev­er, a fail­ure to sur­pass this resis­tance may result in con­sol­i­da­tion around the 50-day mov­ing aver­age, where the dig­i­tal asset could poten­tial­ly estab­lish a new sup­port level.

In the long run, Ethereum’s strength and sta­bil­i­ty may be attrib­uted to its ongo­ing devel­op­ment and real-world use cas­es. With the stak­ing unlock and final­ized tran­si­tion to PoS con­sen­sus mech­a­nism, the net­work sup­pos­ed­ly reached a high­er lev­el of scal­a­bil­i­ty which has, unfor­tu­nate­ly, been dis­proved by the enor­mous fees we are see­ing on the net­work right now.

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