Top meme coin Shiba Inu recorded a 10% price drop in the last 24 hours. The decline came after traders rushed to take profits, raking in $426 million on Tuesday, the strongest selling day since 2022.
With continued profit taking, SHIB’s price may continue to decline. Here’s why.
Shiba Inu Seller Sells Property to Take Profit
On January 7, Shiba Inu network profit/loss (NPL) reached $426 million, marking the largest single-day value since February 2022.
A currency’s NPL measures the difference between the price the asset was last moved or sold and the current market price. It shows the amount of profit or loss that users on the network “realize”.
Once the NPL of the asset increases sharply, it indicates that a large portion of the cryptocurrencies held by investors were sold at a profit. This sudden increase in selling pressure can push asset prices down, especially when the market is unable to absorb the increased supply.
Additionally, SHIB’s relative strength index (RSI) chart also confirms this sharp increase in selling pressure. At the time of writing, it was below the neutral 50 level, at 41.96, and in a downtrend.
The RSI measures oversold and overbought market conditions of an asset. It ranges from 0 to 100, with values above 70 suggesting the asset is overbought and could fall, while values below 30 suggest the asset is oversold and could rebound.
SHIB’s RSI reading at 41.96 shows increased selling pressure, which is a sign of market weakness. If RSI continues to fall towards 30, the price of this meme coin could decrease further.
SHIB Price Prediction: More Declines Ahead
On the daily chart, SHIB has been trading within a descending parallel channel for the past 30 days — a bearish pattern created with two parallel bearish resistance levels that shows consistent lower highs and lower lows. This suggests continued selling pressure. If SHIB sustains in this pattern, its price could drop to $0.000018.
However, if the sell-off subsides and traders start accumulating the meme coin, this bearish view will be invalidated. In that case, SHIB price could rise to 0.000025 USD and move towards 0.000033 USD.