Why The Shiba Inu (SHIB) Price Is Down

The Shiba Inu (SHIB) price has remained lackluster for a while now, with the second-largest meme coin by market cap still below the crucial price level

The price of the second-largest meme coin by market capitalization, Shiba Inu (CRYPTO: SHIB), has remained dull for a while now. While meme coins have been known to experience massive gains over short periods of time, SHIB has largely underperformed this year.

After rallying to a high of $0.000088 on December 2022, SHIB has lost over 84% of its value. This downturn can be attributed to several factors, including Bitcoin's tepid price movement, which has impacted the prices of other cryptocurrencies in the market.

Shiba Inu Price Drops As鯨魚Remain Uninterested

Shiba Inu’s price has mainly been trending down due to its strong positive price correlation with Bitcoin. Data from market intelligence platform IntoTheBlock shows that Shiba Inu’s price correlation with Bitcoin is currently at 0.94 and nearing its peak at 1. As such, the meme coin’s price is largely following the flagship crypto’s price action.

Bitcoin has struggled these past few days to hold above the $60,000 support level, and Shiba Inu is also in a similar situation as it continues to swing below and above the $0.000014 price level. Bitcoin’s weak price action has been attributed to the large slowdown in its demand growth, which can also be said about Shiba Inu.

Further data from IntoTheBlock shows that interest in the meme coin has been declining for a while now, even among 鯨魚. Shiba Inu’s large transactions have remained bearish, highlighting the lack of confidence these Shiba Inu whales have in the meme coin’s trajectory.

These whales have been key in keeping Shiba Inu’s price from falling, especially since there has been a lack of new investors in the meme coin’s ecosystem. Daily new addresses on Shiba Inu have continued to range between 1,000 and 2,000 over the last three months. Meanwhile, the total number of addresses with a balance have remained around 1 million since the start of the year.

With such a bearish outlook, Shiba Inu’s price is bound to drop further if Bitcoin fails to reclaim and hold above $60,000 soon enough. This could also spark a massive wave of sell-offs, as over 52% of Shiba Inu holders are currently out of the money, leading to more downward pressure.

One Positive Amid The Storm

The layer-2 network Shibarium experienced a massive spike in its daily transactions, rising to 28,680 on August 20 from a meager 1,740 the previous day. This development is noteworthy, considering that the network’s daily transactions have ranged between 1,000 and 4,000 over the last 30 days. Shibarium’s daily daily transactions have also drastically declined since the start of the year.

However, it remains to be seen if this surge recorded on August 20 marks the beginning of an increase in the daily transactions on the network. If so, it could positively impact Shiba Inu’s price since increased network activity on Shibarium leads to more Shiba Inu burns, ultimately affecting its price.

At the time of writing, Shiba Inu is trading at around $0.00001375, down in the last 24 hours, according to data from CoinMarketCap.

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