The cryptocurrency market experienced a significant downturn in the past 24 hours, with Bitcoin briefly dipping below $94,000. Shiba Inu (SHIB), the popular meme coin, was not spared from the sell-off, dropping over 10% from its previous price.
Resistance Bites Back
Analysts believe Shiba Inu’s price correction stemmed from encountering a strong resistance zone. Crypto Basic reported that the meme coin encountered a multi-month supply zone around $0.00003343, which coincides with its 0.618 Fibonacci extension level. Data from IntoTheBlock reveals this resistance level is backed by a significant buying force, with 153,110 addresses holding a combined 28 trillion SHIB at an average price of $0.000032. This concentrated supply proved too strong for Shiba Inu to overcome, triggering the double-digit price correction.
Potential Support on the Horizon
Despite the recent slump, analysts are pinpointing a potential support area for Shiba Inu if the downtrend continues. According to IntoTheBlock, the next major support level sits at $0.000022. This zone is believed to hold a significant amount of SHIB, potentially acting as a local demand zone.
The analysis indicates that roughly 107,920 wallet addresses hold Shiba Inu within the $0.000019 to $0.000024 price range, with an average purchase price of $0.000022. These addresses collectively hold a substantial 119.55 trillion SHIB, which could act as a buffer against further price declines.
Current Price and Future Outlook
As of writing, Shiba Inu is trading at $0.00002687, still over 22% away from the identified support level. However, if the price stabilizes around the current level, there’s a possibility of a retest of the failed resistance zone at $0.000032.
On-Chain Analysis Reflects Market Sentiment
Shiba Inu’s on-chain analysis paints a picture largely consistent with the prevailing bearish sentiment. Most major indicators on the network are currently bearish, suggesting skepticism among investors.
Large transactions on the Shiba Inu network have decreased significantly in the past 24 hours, with net network growth remaining negative. Additionally, a growing number of SHIB holders are now experiencing portfolio losses, while whale accumulation has also dropped in recent days.
Despite the bearish signals, it’s important to note that a significant portion (around 64%) of Shiba Inu holders remain profitable at the current price. While 26% are experiencing losses, another 10% are currently at break-even.
Shiba Inu’s recent price correction highlights the importance of technical analysis in navigating the volatile cryptocurrency market. Identifying key resistance and support levels can help investors make informed decisions. While the short-term outlook for SHIB appears uncertain, the presence of a potential support zone and a large number of profitable holders offers a glimmer of hope.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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