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Shiba Inu coin has lost over 50% of its prime price in the last few weeks. This fall is happening despite the number of coin investors growing to hit the 1 Million mark.
Before this fall, the price had a 500% growth helping push the coin to a 35 billion dollars in market valuation. This made it the 10th largest cryptocurrency in the market dislodging its longtime competitor dogecoin.
This dip seems to not respect existing support zones on its way down indicating the power that sellers have currently. There is a key number of reasons analysts believe could be causing this decline.
After such a huge rally, it was inevitable for profitable investors to take some profit. This has accelerated the selling momentum as the large investors cash out.
It is evident a few numbers of whale investors control the majority of Shiba coins. Hence, any sell move by these investors has a big impact on the price.
Once the decline started, short-sellers came in to benefit from this fall increasing the selling pressure further.
Sellers are still in control hence the reason why the price is falling.
Decline in Shiba Inu Popularity
The coins activity on social media has been declining ever since it hit its peak. Naturally, cryptocurrencies are driven by popular opinions and influencers.
This is because most investors consider them to be speculative assets and social media channels are at the middle of this popularity drive. A quick check-in these channels shows Shiba is no longer trending and most sentiments have turned negative.
Recently, retail traders have become aware of social media’s power in influencing market direction. For Shiba Inu, there is a group of dedicated followers known as SHIBARMY that was fundamental in pushing the recent rally.
However, its activities are slowing down indicating a decline in interest in the coin. This is visible by the continuation of the Shiba coin price drop
Decrease in Shiba transactions volumes
Data from the majority of trading platforms indicate SHIB trading volume is decreasing. This is different from earlier days of the rally when the volume of the coin was topping the market.
Volume indicates the number of orders in the market. Hence, a decline shows a reduction of interest in the coin affecting the price in the process.
The decrease in volume is a sign that investors could be shifting their focus to other investment assets. This is normal as investors tend to follow the money.
However, once the coin gets back to bullish momentum, the investor is likely to come back helping grow the momentum again.
Shiba Inu Supply Concerns
Supply remains a controversial factor among the Shiba investors community. It seems to remain relatively constant despite promises of coin burning.
The amount of Shiba coins in circulation is huge. Such a huge number could be a hindrance to price growth if there is not enough demand. To handle this, the network has introduced a burning strategy targeting to make the coin deflationary.
Over 500 trillion Shiba coins remain in circulation. This is a reduction from the 1 quadrillion supply at the launch of the coin.