Even the burn effect has disappeared… Meme coin Shiba Inu (SHIB) warns of a deep fall

▲ Shiba Inu (SHIB)/ChatGPT Generated Image ©

Shiba Inu (SHIB) is facing a risk of an additional decline of over 10% from its current price, as it is caught in a sharp drop in token burn volume and weakening demand from individual investors. Analysis suggests that if the 50-day Exponential Moving Average (EMA) and Fibonacci support level break simultaneously, it could fall to $0.00000405.

According to investment media FXStreet on August 7 (local time), Shiba Inu tested a break below the 50-day EMA of $0.00000466, falling for three consecutive days until Friday. Following a roughly 5% drop the previous day, the postponement of the vote on the US crypto market structure bill, the Clarity Act, increased overall market risk aversion, leading to concentrated selling pressure on meme coins.

A decline in the token burn rate also acted as a burden. Shiba Inu's burn volume exceeded 97.16 million on Saturday, coinciding with a rebound at the beginning of the week, but sharply dropped to 6.62 million on Thursday. The diagnosis is that a rapid decrease in the scale of burns, which reduces circulating supply, could also weaken price support from the supply side.

In the derivatives market, individual investors' directions were mixed. According to CoinGlass, SHIB futures open interest remained at approximately $43.53 million over the past 24 hours. During the same period, long position liquidations amounted to $172,390, significantly exceeding short position liquidations of $17,670, indicating a weakening of bullish positions. The funding rate rebounded from -0.0013% the previous day to 0.0059% on Friday, but the sharp fluctuations showed that individual investor sentiment is unstable.

The Fibonacci 78.6% retracement level, coupled with the 50-day EMA, is formed at $0.00000462. If trading decisively closes below this support zone, an additional drop of over 10% to $0.00000405 could open up. The Relative Strength Index (RSI) also fell below the neutral line at 49 on a daily basis, indicating weakening buying pressure. Conversely, if it rebounds from the 50-day line, the 100-day EMA at $0.00000498 and the Fibonacci 50% retracement level at $0.00000538 are expected to act as the next resistance levels.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*