Shiba Inu (SHIB) Falls 33% In February And It’s Not Over
In February, the Shiba Inu cryptocurrency experienced a significant decline of 33%, leaving it in the red zone.
Unfortunately, the outlook for March isn’t much better, as on-chain metrics suggest that the influx of SHIB on exchanges will continue to weigh heavily on the coin.
This has caused some investors to consider cashing out their Shiba Inu holdings.
Hodlers may start cashing out Shiba Inu
Despite positive news about the project, the Shiba Inu coin has been in a free fall since the beginning of February.
By the end of the first week of March, the meme token had lost an additional 15%, which has prompted some investors to sell off their SHIB.
Glassnode, an authoritative on-chain analytical resource, has reported a steady increase in the number of Shiba Inu coins placed on exchanges since mid-February.
As of March 9, the figure has reached almost 1.1 trillion SHIB. This increase in coins on trading platforms, particularly on the wallets of large market players, is typically viewed as a negative signal for the currency.
It could indicate that the owners of these tokens plan to sell them on the exchange, causing a further decline in the coin’s value.
SHIB hodlers may have another reason to worry as transaction volumes for the cryptocurrency have significantly dropped.
Santiment, a blockchain analytics platform, reports that the Shiba Inu network recorded a massive decline in the number of transactions.
Specifically, the volume of transactions has plummeted from a staggering 11.7 trillion SHIB as of February 2 to a meager 240 billion as of March 9.
This alarming trend is causing concerns among SHIB investors and could indicate a bearish trend for the cryptocurrency.
A decline in the on-chain indicator often signals a downturn in the token’s price, and the Shiba Inu community’s developers and enthusiasts need to take action to boost network activity and demand; otherwise, the SHIB price may continue to decline in the upcoming weeks, entering a bearish trend.
SHIB price expects new losses
The MVRV on-chain indicator also paints a bleak picture for SHIB, as it calculates the ratio between the coin’s market and realized value.
As shown in the chart below, investors who purchased SHIB in the last 30 days would currently face a 15% loss if they decided to sell.
Historical trends demonstrate that SHIB holders may continue selling until the price reaches $0.00000955, resulting in a loss of about 22%.
If this level fails to hold, Shiba Inu’s price could plummet further to the next potential rebound level of $0.00000852, resulting in a loss of approximately 35%.
At present, the SHIB rate is in a state of flux, and there are a few possible scenarios that could play out in the near future.
Should the market experience growth, it’s likely that the SHIB rate will encounter resistance around the $0.00001236 mark, as many hodlers may be tempted to cash in their coins for a profit of around 7%.
However, if the rate manages to break through this level and sustain its momentum, we could see a significant rally towards the $0.00001434 mark, which would represent a gain of approximately 23%.