Shiba Inu Price Forecast: Will Solana meme rally trigger 30% SHIB decline?

Ibrahim Ajibade
Updated: Mar 23, 2024, 21:17 GMT+00:00

Key Points:

  • Shiba Inu (SHIB) price has consolidated within the $0.00003 and $0.000026 this week, as bulls struggle to hold on to their February gains.
  • Shiba Inu's declining open interest and trading volume suggests SHIB has lost short-term traction as investors switch focus to newly-launched Solana memes.
  • SHIB is now trading below its 20-day Simple Moving Average, signaling a looming bearish downturn.
Shiba Inu (SHIB) Price Forecast

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Shiba Inu (SHIB) price has consolidated within the $0.00003 and $0.000026 territory this week, as bulls struggle to hold on to 320% gains recorded over the last 30-days.

On-chain data trends highlight the key factors behind the ongoing SHIB price stagnation, and why a recovery phase is likely to follow.

Shiba Inu trading volume dips $5 billion as Solana Memes take center stage

Shiba Inu’s lackluster price performance last week can be attributed to investors shifting focus to the new meme tokens emerging across the crypto market.

Solana’s Dogwifhat (WIF) continues to dominate the top gainer’s chart, while newly-launched SLERF achieved the $1 billion unicorn market cap status within a few days post-launch.

Similarly, the Avalanche (AVAX) blockchain has also moved to ape-in on the memecoin mania as the foundation announced a $1 million incentive fund for traders and liquidity providers.

As Solana’s meme sector soared to new peaks, Shiba Inu has struggled to attract sufficient demand to break out above the $0.000003 resistance.

Shiba Inu (SHIB) Open Interest vs. Trading Volume | Source: Coinglass
Shiba Inu (SHIB) Open Interest vs. Trading Volume | Source: Coinglass

The Coinglass chart above shows that SHIB open interest stood at $117 million on March 5. But at press time on March 2023, it has now dropped to $77 million, marking a $40 million capital outflow from Shiba Inu derivatives markets in the over the last two weeks.

More importantly, another critical metric that highlights the decline in investor interest is the SHIB trading volume trend, which as dropped by a whopping $4.9 billion from $5.2 billion on March 5 to just $289 million worth of trades recorded as of March 2023.

This drop-off in open interest and trading liquidity both highlight the SHIB market is struggling to attract new demand, as investors appear to be focusing on the newer trending meme tokens on the Solana and Avalanche network.

While the overall positive sentiment surrounding the broader memecoin markets has helped Shiba Inu price avoid a major downswings, if the lack of demand persists, the bears could eventually seize the momentum in the coming days.

Shiba (SHIB) Price Forecast: Bears targeting  $0.00002 retest

Shiba Inu is currently trading at $0.000028 at the time of writing on March 23, down 11% from it’s weekly top. But the $40 million in Shiba Inu derivatives market capital inflows and market $4.9 drop-off in trading liquidity raises the risk of volatile 30% SHIB price downswing toward $0.000020.

The Bollinger band technical indicator also supports this bearish Shiba Inu price outlook. It shows that after a week of stagnation, crypto traders are now willing to pay less for SHIB than they were 20 days ago.

Shiba Inu (SHIB) price forecast | March 2024 | Source: TradingView
Shiba Inu (SHIB) price forecast | March 2024 | Source: TradingView

If the bears seize control as predicted, a SHIB price detour towards $0.000020 could be on the cards. However, the lower limit of the Bollinger band indicator shows that the bulls could mount a significant support buy-wall at the $0.000024 territory.

But, on the upside, if the market mometum flips positive again, bulls could set their sights on a $0.00004 if they can break out from the looming sell-wall at the $0.000030 resistance.

However, this looks unlikely within the current market dynamics as shown by the negative trends in the trading volume and open interest metrics analyzed above.

About the Author

Ibrahim Ajibade Ademolawa is a seasoned research analyst with a background in Commercial Banking and Web3 startups, specializing in DeFi and TradFi analysis. He holds a B.A. in Economics and is pursuing an MSc in Blockchain.

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