In a significant technical development, Shiba Inu’s daily chart has revealed a “death cross” for the first time in 14 months. This bearish signal occurs when the 50-day moving average falls below the 200-day moving average, coinciding with a steep price drop for the cryptocurrency.
Accelerating Price Decline
Over the weekend, widespread sell-offs pushed Shiba Inu’s price below $0.000004, reaching a low of $0.0000037 on Saturday. This marked four consecutive days of decline, the longest losing streak since November 11. Although there was a slight recovery from the dip on Sunday, the meme coin saw a 6.87% decline over the past 24 hours and a 14% decrease in value over the past week.
Matt Hougan, Chief Executive of Bitwise, remarked that while a strong buying opportunity will eventually arise, its precise timing remains difficult to predict.
Market Pressures Intensify
The technical picture for Shiba Inu has weakened amidst a broader sell-off in the cryptocurrency market. According to CoinGlass data, liquidations across the market reached $1.96 billion in the last 24 hours. Multiple pressure points have been impacting crypto assets recently, with the latest downturn deepening amidst gradual market shifts rather than sudden crashes.
As a meme coin on the Ethereum network with a substantial investor following, Shiba Inu’s recent price action has tested the resolve of committed holders, especially as prices approach yearly lows.
Liquidity and Demand Contract
Glassnode analysts highlighted a contraction in stablecoin supply by $17 billion over the last month, marking the steepest decline since 2022. The conversion of stablecoins to fiat currency by investors is reducing purchasing power for Bitcoin and other crypto assets. This scenario suggests that diminishing demand side pressure could further impact prices.
Glassnode analysts emphasized that the move from stablecoins to fiat reduces the buying power in the market, exerting pressure on Bitcoin and other crypto assets.
Levels to Watch
Uncertainty remains over whether buying power will return to the market. A recovery in buying could lead to a rebound for Shiba Inu, with the $0.000005 region, where the 50-day and 200-day moving averages converge, as a key level to surpass in the near term.
If the sell-off persists, $0.000003 becomes a critical level in a bearish scenario. Current technical signals and the widespread liquidity crunch are collectively influencing price dynamics.
