Leading meme coin Shiba Inu (SHIB) has seen its value drop by 18% in the past 24 hours. This situation reflects a downturn in the broader cryptocurrency market, with global market capitalization falling 5% over the same period.
An assessment of the on-chain and technical setup of this Meme Coin reveals a weakening bullish momentum and a predominance of bearish sentiment. This indicates that SHIB could continue this downtrend. Here’s how that could happen.
Shiba Inu Loses Support From Optimists
The decrease in open interest (OI) of Shiba Inu confirms a decrease in activity in the market and a decrease in enthusiasm from these Meme Coin Holders. At the time of writing, this figure stood at $82.49 million, down 32% in the past 24 hours.
OI refers to the total number of active contracts in the futures or options market that have not been liquidated, expired or closed. When it decreases, it is a negative signal. It suggests that traders are closing their positions, potentially because they believe the asset value will continue to fall or they want to limit losses.
This drop in OI amid falling prices, as in the case of SHIB, is a sign of strong negative sentiment among market participants.
Additionally, the Median Investment Age (MDIA) of this Meme Coin has been steadily decreasing since November 9, confirming an increase in selling pressure in the market. At the time of writing, SHIB’s MDIA was 877, having fallen 1.5% in the past four days.
MDIA tracks the average age of coins based on their USD value. It measures the average time that a USD invested in a cryptocurrency has been stalled in its current wallet. A higher MDIA suggests that investors have held their holdings for the long term, while a lower MDIA means newer or withdrawn capital flows.
When an asset’s MDIA decreases, it suggests that old coins are being moved, indicating increased trading activity. When this occurs during a period of falling prices, it indicates profit taking or loss cutting.
It points to a change in market sentiment, with investors showing a greater willingness to sell their shares. This activity contributes to the negative trend when selling pressure is greater than buying pressure.
SHIB Price Forecast: Important Targets to Watch
At the time of writing, the Shiba Inu was trading at $0.000023. The double-digit decline over the past 24 hours has sent its price falling towards its 20-day exponential moving average (EMA), which tracks its average price over the last 20 trading days.
The 20-day EMA acts as dynamic support during an uptrend. A decline towards this level means reduced buying pressure.
However, it provides a support level where price corrections or pullbacks often find buying interest. For the Shiba Inu, its 20-day EMA forms a support level at $0.000020.
If the price breaks below the 20-day EMA, it indicates a change in momentum, as Meme Coin no longer finds support at this level. This break will attract further selling, as traders see it as a negative signal, prompting them to exit or take short positions. If the price level of 0.000020 USD fails to hold support, SHIB price will continue to decline to 0.000016 USD.