THE Shiba Inu (SHIB) the price remained weak for a while, with the second largest meme coin by market capitalization still below the crucial price level of $0.00002. This unimpressive price action This is due to several factors, including Bitcoin’s tepid price movement.
Why Shiba Inu price dropped
The price of Shiba Inu has been on a downtrend mainly due to its strong positive price correlation with Bitcoin. Data from market intelligence platform IntoTheBlock shows that Shiba Inu’s price correlation with Bitcoin is currently at 0.94 and approaching its peak at 1. As such, the meme coin’s price is mimicking the price action of the leading cryptocurrency.
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Bitcoin has struggled in recent days to hold above the $60,000 support level, and Shiba Inu is also in a similar situation as it continues to oscillate below and above the $0.000014 price level. Bitcoin’s weak price action has been attributed to the significant slowdown in demand growth, which can also be said about Shiba Inu.
Additional data from IntoTheBlock shows that interest in the meme coin has been on the decline for some time, even among whales. Large Shiba Inu transactions have remained flat and bearish, highlighting the lack of confidence from these Shiba Inu Whales has in the trajectory of the meme coin.
These whales have been instrumental in keeping the Shiba Inu price afloat, especially as there has been a lack of new investors in the meme coin ecosystem. Daily new Shiba Inu addresses have continued to fluctuate between 1,000 and 2,000 over the past three months. However, the total number of addresses with a balance has remained around 1 million since the beginning of the year.
With such a pessimistic outlook, the Shiba Inu price is undoubtedly at risk of falling further. The meme coin could fall even further if Bitcoin fails to recover and hold above $60,000 soon. This could also trigger a massive selloff, as over 52% of Shiba Inu Carriers are currently out of the money, leading to further downward pressure.
A bright spot in the storm
THE Shibarium Layer 2 Network experienced a massive increase in its daily transactions, rising to 28,680 on August 20 from a meager 1,740 the day before. This evolution is significant considering that the network’s daily transactions have ranged between 1,000 and 4,000 over the past 30 days. Shibarium Daily Transactions have also decreased dramatically since the beginning of the year.
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However, it remains to be seen whether this spike on August 20 marks the beginning of an increase in daily transactions on the network. If so, it could positively impact the price of Shiba Inu, as increased network activity in Shibari leads to more Shiba Inu burnsultimately affecting its price.
At the time of writing, Shiba Inu was trading at around $0.00001375, down over the past 24 hours, according to data from CoinMarketCap.
Featured image created with Dall.E, chart from Tradingview.com