In the past two weeks, although most mainstream cryptocurrencies have performed quite well, there are also some assets that have disappointed. For example, Bitcoin (BTC) rose by 10%, and Ethereum (ETH) increased by 4%.
However, the popular meme coin Shiba Inu (SHIB) has become one of the biggest losers, with its valuation dropping over 15% during this period, currently trading at approximately $0.00002575, and still declining about 6% daily.
The meme coin sector is facing downward pressure
Shiba Inu is just one of many meme coins; overall, the meme coin sector is under significant pressure.
In the past 24 hours, the total market capitalization of the entire sector has decreased by 4%, with well-known cryptocurrencies such as DOGE, PEPE, WIF, BONK, FLOKI, and PNUT experiencing significant losses. This trend indicates that bearish sentiment may continue to dominate, affecting the price movements of these assets.
The dilemma of Shiba Inu's burning mechanism
Shiba Inu's burning mechanism was supposed to reduce the supply in the market, thereby enhancing its scarcity and potential value. However, data shows that SHIB's burn rate has significantly decreased by nearly 70% in the past week.
Only 128 million SHIB were burned, far below expectations. This decrease in the burn rate may affect SHIB's long-term price appreciation potential. Nevertheless, since the implementation of the burning mechanism, the Shiba Inu team and community have burned over 410 trillion tokens, but the current circulating supply remains quite large, at about 589 trillion SHIB.
Large transaction volume shows bearish signals
Another indicator worth noting is the large transaction volume of Shiba Inu (i.e., transactions over $100,000). According to data from IntoTheBlock, this indicator has decreased by 4.2%, now entering a bearish range, suggesting that the market may face further selling pressure.
Positive signals may suggest a rebound
Despite numerous negative factors, there are also some bullish signals indicating that SHIB may rebound. One significant factor is that Shiba Inu's reserves on exchanges have decreased. According to data from CryptoQuant, SHIB's exchange reserves have recently dropped to the lowest level since spring 2021.
This change indicates that an increasing number of SHIB tokens are being transferred to self-custody wallets, reducing the supply on centralized exchanges and alleviating selling pressure, which is seen as a bullish signal for the market.
The RSI indicator suggests oversold rebound opportunities
Additionally, from a technical perspective, Shiba Inu's relative strength index (RSI) also provides potential buy signals for investors. The RSI is a technical tool that measures the rate and magnitude of price changes, ranging from 0 to 100.
When the RSI is below 30, it is generally considered oversold, which may signal rebound opportunities. Currently, SHIB's RSI is slightly above the oversold zone, indicating that a recovery may be on the horizon. Public. Zong. Good: Liu Liu says Coin
Conclusion
Although Shiba Inu faces multiple challenges, there are also some positive signs indicating that it may recover from the current slump.
Investors should pay attention to market changes, especially dynamics related to the burning mechanism, exchange reserves, and key indicators like RSI, as these may provide important clues for future trends.
