Shiba Inu (SHIB0.83%) investors are reeling as the high-flying token reverses many of its October gains. The crypto market is notoriously volatile and hard to predict. But Shiba Inu has weak fundamentals, and this may be the beginning of a bear market for the asset.
Let’s explore two reasons why Shiba Inu’s crash could be just getting started.
- 1. Whales can take profits
- Why is shiba dropping
- Shiba Inu price fails to participate in the crypto market rebound
- Why is shiba dropping so much
- Why does Shiba Inu gain value?
- Why is shiba dropping so fast
- Key points
- Why is shiba dropping right now
- Why is shiba inu dropping
- Why is shiba inu dropping today
- Why is shiba falling
- Shiba Inu price suffers from decreased speculation, says on-chain metric
- Why is shiba inu coin dropping
- 1. Shiba Inu had further to fall
- Why is shiba inu dropping so much
- Why is shiba inu dropping right now
- Shiba Inu still raises red flags
1. Whales can take profits
Shiba Inu prices are now down around 30% from an all-time high of $0.000088 reached late October. The correction comes amid fears that those with large holdings (dubbed whales) will take profits. This is a major threat because Shiba Inu depends on the greater fool theory, which suggests most people buy it to sell it to others for more in the future.
Why is shiba dropping
The relentless fall has pushed the 7-day moving average to the lowest reading since early May, signaling that the daily level of crowd interaction or speculation with the token has erased the spike associated with the jump in Shiba Inu price in early May.
FOMO has left the building,
SHIB Daily Active Addresses (DAA) – Santiment
Shiba Inu price fails to participate in the crypto market rebound
Since July 21, Shiba Inu price has climbed 5.95%, owing the positive return to the 11.22% gain on July 21 as the return from July 22 is -4.74%. The return stands in stark contrast to the 40% gains logged by Bitcoin, Ethereum, and other altcoins.
Why is shiba dropping so much
Kraken, a cryptocurrency exchange platform, announced it would not list Shiba Inu coin on its platform, even though there was a strong indication that it would, as I wrote for the Deseret News.
- ”There’s more work for us to do as we move through our listing review process,” Kraken said Tuesday in a Twitter thread.
The Shiba Inu community — commonly known as the Shiba Army — was excited to see the coin listed on Kraken because it would offer the potential for more people to invest.
- “Many users questioned why the exchange would make a pledge it did not intend to honor, while others threatened to delete their Kraken accounts,” according to Business Insider, “Yet others called on fans to have patience.”
Why does Shiba Inu gain value?
Shiba Inu coin’s value and price is often determined by social media hype.
Why is shiba dropping so fast
Image source: Getty Images
Here are some of the reasons for SHIB’s 25% price drop.
- Shiba Inu has dropped 25% in two weeks, but it’s still up 17% in the past month.
- It’s early days for the Shiba Inu metaverse, and questions remain about SHIB’s utility.
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Shiba Inu’s (SHIB) price has fallen 25% in the past fortnight, according to CoinGecko data. Given that the whole crypto market has slumped again in recent weeks, this drop isn’t so surprising.
Why is shiba dropping right now
According to CoinMarketCap.com, popular pup meme coin, Shiba Inu, has seen a significant price drop of nearly 15% over the past 24 hours. Originally shilled as a “Dogecoin killer” when it launched in August 2020, the $SHIB token price soared more than 40% in 48 hours when Coinbase (NASDAQ:COIN) announced that it would list the dog-themed coin in September 2021.
Courtesy: CoinMarketCap.com, Shiba Inu, November 4, 2021
While there’s no specific trigger event for this chart drop that pushed Shiba Inu out of the top-10 crypto projects ranked by market cap, Shiba Inu has a serious centralization issue.
Its trading page shows that nearly 70% of Shiba’s total circulating supply is consolidated in 10 wallets.
And no one knows if those 10 wallets are all held by different investors or one or two individuals.
Why is shiba inu dropping
Shiba Inu price has trended lower in a descending parallel channel since the May crash, offering only brief opportunities from low probability patterns or setups. The weak performance is a marked deviation from the extreme price events in early May when SHIB climbed almost 2,000% from May 7 to May 10.
Why is shiba inu dropping today
Dogecoin and Shiba Inu coin are hitting massive heights right now that show the cryptocurrency market is still something to watch.
This week, Dogecoin hit its two-month high, surging to $0.335 on Coinbase Thursday, per CoinDesk.com.
- That’s the highest marker for the coin since Aug. 20.
- The coin had been hovering in the $0.30 range, a sign that there was slight growth.
Meanwhile, the Shiba Inu cryptocurrency coin Wednesday hit an all-time high, reaching a cost of $0.0000594 per coin.
- The coin crashed a little, having peaked at $0.00009 in the last three days before dropping back down to $0.00006, according to CoinDesk.com.
Investors told CoinDesk.com that traders may have moved from Shiba Inu over to Dogecoin.
Why is shiba falling
ShibaSwap TVL – Defi Llama
A final example of the limited interest in SHIB is the steady, low levels in the social media volume. The Santiment Social Volume metric captures the number of mentions of SHIB on 1000+ crypto social media channels, including Telegram groups, crypto subreddits, discord groups and private traders chats.
Excluding a brief rise in the social volume in mid-July, social media interest has remained stagnant, including during the launch of ShibaSwap in early July and following the eToro announcement.
SHIB Social Volume – Santiment
Shiba Inu price suffers from decreased speculation, says on-chain metric
The latest Daily Active Addresses metric published by Santiment shows that the number of unique addresses involved in SHIB transactions daily continues to decline from the early July spike when ShibaSwap went live.
Why is shiba inu coin dropping
Here are some of the reasons for SHIB’s 25% price drop.
1. Shiba Inu had further to fall
Let’s zoom out slightly and look at Shiba Inu’s price performance over the past month.
Its price is actually up around 17% in the past 30 days (compared to Bitcoin, which is only up 5%). This is because SHIB jumped over 45% at the start of February on news of its metaverse plans.
Since then, uncertainty over the developing Russia-Ukraine crisis has hit the whole crypto industry.
Why is shiba inu dropping so much
In contrast, Shiba Inu has a fairly unexciting DEX and a metaverse that’s under construction.
When you look at the rags-to-riches stories of Shiba Inu and Dogecoin, it is tempting to think that you might be able to get rich on the back of these pet coins.
The trouble is that a lot of people have also lost money buying SHIB.
Why is shiba inu dropping right now
But so far, most of what you can do on ShibaSwap is earn SHIB-related tokens such as BONE and LEASH. There’s little to set it apart from established DEXs like Uniswap.
There’s some substance behind Shiba Inu, just not very much.
When the market slumps, it’s cryptos with less utility and less established reputations that are hardest hit. Part of the reason for the recent crypto crash is that economic uncertainty has driven people out of riskier assets like cryptocurrency.
And meme tokens are risky even by crypto standards.
Shiba Inu still raises red flags
Shiba Inu does have slightly more utility than other meme tokens. Unfortunately, that doesn’t make it a good investment.
If the whales start offloading, a sharp dip could break the greater fool assumption for new investors, leading to a chain reaction of selling.
Image source: Getty Images.
On Nov. 1, a major Shiba Inu whale moved $2.78 billion worth of tokens out of their wallet to different accounts. It is believed that this unknown investor initially purchased 70 trillion coins for $8,000 back in August 2020 and might finally be ready to book some well-deserved profits.
It gets worse.
According to data from coinmarketcap.com, just 10 investors control a jaw-dropping 66% of the total Shiba Inu supply, compared to just 5% for the top 10 Bitcoin whales. The high concentration of ownership makes Shiba Inu risky because these people can easily move the price.
And if they decide it’s time to move on, other investors will be left holding the bag.