The price of Shiba Inu (SHIB) has experienced a significant decline of 20% since December 9, despite a broader recovery in the cryptocurrency market. This decline is in contrast to the double-digit gains seen by major assets like Bitcoin, Ripple (XRP), and Cardano (ADA) during the same period.
The decrease in SHIB's price can be attributed to a shift in investor sentiment, particularly among whale investors. On-chain data shows a decline of 83% in SHIB transactions exceeding $100,000 between December 9 and December 18. This decline in whale activity coincides with the rise of Solana-based meme coins, such as Fartcoin (FART) and Goatseus Maximus (GOAT), which have gained attention and capital from investors, overshadowing legacy meme coins like SHIB and Dogecoin.
The popularity of Solana meme coins has negatively affected the demand for Shiba Inu among whale investors. Despite a market rebound following a flash crash triggered by geopolitical risks, SHIB has failed to capitalize on the momentum. Large transactions involving SHIB have significantly decreased, with only 3.3 trillion SHIB traded in large transactions on December 17, down from 18.85 trillion on December 9. This decline in whale transactions indicates a loss of confidence among large investors, which could further impact SHIB's price struggles.
The dominance of Solana's meme coin ecosystem not only diverts capital away from Shiba Inu but also contributes to a broader bearish sentiment surrounding the token. As whale demand diminishes, market liquidity is likely to decrease, potentially leading to further sell-offs and price corrections. The shift in investor focus towards newer meme coins raises concerns about Shiba Inu's ability to recover in the current market landscape.
From a technical perspective, Shiba Inu is facing significant bearish pressure, with a critical support level at $0.00002561 at risk of being breached. The price has been on a prolonged downtrend, dropping by 20.64% over the past nine days. The Relative Strength Index (RSI) has also fallen below the neutral mark of 50, indicating a weakening buying momentum and increasing dominance of bearish sentiment.
Immediate resistance for SHIB is observed at $0.00002874, which aligns with the midline of the Bollinger Bands. A decisive move above this level could trigger a short-term rally, especially if accompanied by a surge in trading volume. However, if the price fails to maintain above the critical support of $0.00002561, it risks further declines, with the next major support level at $0.00002451. A breach below this level could invalidate any bullish outlook, potentially driving SHIB down to $0.00002200 and intensifying the bearish trend.
As the cryptocurrency market evolves, it is important to monitor the dynamics surrounding Shiba Inu and its competitors. The competition from Solana's meme coins and the shifting preferences of investors could significantly impact SHIB's future performance. Investors are advised to remain vigilant and conduct thorough research before making any investment decisions, as the landscape remains risky and uncertain.