The Shiba Inu (SHIB) price has remained stagnant for some time, with the second-largest meme coin by market cap failing to breach the crucial price level of $0.00002. This subdued performance can be attributed to several factors, notably Bitcoin’s lackluster price movement.
Shiba Inu’s price decline is largely tied to its strong positive correlation with Bitcoin. According to market intelligence platform IntoTheBlock, Shiba Inu’s price correlation with Bitcoin stands at 0.94, approaching a near-perfect correlation of 1. This means the meme coin’s price is closely mirroring Bitcoin’s price trends.
Bitcoin has recently grappled with maintaining its position above the $60,000 support level, and Shiba Inu faces a parallel struggle as it oscillates around the $0.000014 mark. The weakness in Bitcoin’s price performance has been associated with a notable deceleration in its demand growth, a trend that is also affecting Shiba Inu.
Further insights from IntoTheBlock reveal a declining interest in Shiba Inu, even among large holders or ‘whales.’ The volume of substantial transactions involving Shiba Inu has remained flat and bearish, indicating a significant lack of confidence in the coin’s future among its major stakeholders.
These whales have been crucial in supporting Shiba Inu’s price, particularly in the absence of new investors entering its ecosystem. Data shows that daily new addresses for Shiba Inu have ranged between 1,000 and 2,000 over the past three months. Meanwhile, the total number of addresses holding Shiba Inu has remained steady at around 1 million since the beginning of the year.
Given this bearish outlook, Shiba Inu’s price is at risk of further declines. If Bitcoin fails to reclaim and sustain a position above $60,000 soon, Shiba Inu could face a sharp downturn, potentially triggering massive sell-offs. Currently, over 52% of Shiba Inu holders are in a loss-making position, which could exacerbate selling pressure.
Amid this turbulence, there is a glimmer of hope: the layer-2 network Shibarium recorded a significant spike in daily transactions, jumping to 28,680 on August 20 from a mere 1,740 the previous day. This is notable given that Shibarium’s daily transactions have averaged between 1,000 and 4,000 over the last month and have dwindled since the year’s start.
It remains uncertain whether this surge on August 20 heralds a lasting increase in daily transactions on the network. If it does, it could positively influence Shiba Inu’s price, as heightened network activity on Shibarium leads to more Shiba Inu tokens being burned, ultimately impacting the price.
As of now, Shiba Inu is trading around $0.00001375, showing a decline in the last 24 hours, according to data from CoinMarketCap.
