Shiba Inu Crashes 30% in a Month: Layer-2 Shibarium’s TVL Plunges 63% as Daily Users Drop Below 1,300
The second-largest memecoin, Shiba Inu (SHIB), is still subject to major challenges as its price falls and its layer-2 solution Shibarium exhibits alarming trends of falling popularity. Currently trading just under at $0.000016, the coin has dropped a startling 50% from its November 2024 top and over 30% in the past month.
Shibarium’s Declining Ecosystem
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The sharp drop in Shibarium’s ecosystem measures raises maybe more questions than the price action. Launched to turn SHIB from a simple meme token into a utility-driven bitcoin, the layer-2 network has seen its Total Value Locked (TVL) fall from an all-time high of $6.27 million to $2.3 million.
Key statistics paint a troubling picture of Shibarium’s health:
- Active accounts have plunged to 1,260 from nearly 4,500 last month
- Transaction fees have hit multi-week lows, generating only 450 BONE ($130) on Saturday
- Major protocols within the ecosystem have seen significant TVL declines:
- ShibaSwap: 40% drop to $1.26 million
- WoofSwap, ChewySwap, and DogSwap: Over 30% decline each
This ecosystem-wide decline is particularly significant given Shibarium’s role in SHIB’s tokenomics. The network uses BONE for transaction fees, which are partially converted to SHIB and burned, affecting the token’s supply dynamics.
SHIB/USD Technical Analysis Points to More Downside
On the SHIB/USD daily chart, the development of a death cross where the 50-day Weighted Moving Average crosses below the 200-day WMA points to a perhaps protracted bearish period. For investors, this technical pattern along with SHIB’s inability to keep support above the crucial $0.00001856 level from December 20 presents a worrying picture.
Complementing the pessimistic view, SHIB has battled the 26-day exponential moving average (EMA), a crucial resistance level that might have indicated a possible comeback. The lack of significant purchasing pressure at this level suggests ongoing market pessimistic attitude.
Supply Dynamics and Resistance Levels
With over 40,680 addresses holding 423.54 trillion SHIB between $0.000018 and $0.000019, the Global In/Out of the Money (GIOM) indicator exposes notable overhead resistance. Given many investors may try to leave their positions upon breakeven, this huge supply cluster poses a strong obstacle to price appreciation.
Between $0.000019 and $0.000024 there is a secondary resistance zone where an extra 155,670 addresses retain 68.23 trillion SHIB, so complicating the road to recovery.
Shiba Inu Price Forecast
Technical analysis indicates SHIB may aim for a near-term target of $0.00001170, therefore reflecting a possible 30% drop from present levels. For SHIB’s chances for recovery, the mix of dropping network utilization, eroding fundamentals, and bearish technical indicators creates major difficulties.
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