The prominent memecoin has returned to the bottom of 2022, negating all gains we saw back in October. The only acceptable scenario for the cryptocurrency right now would be a recovery and a bounce from the bottom. However, some metrics suggest it would be problematic.
According to the daily chart of the token, Shiba Inu fell below the lower border of the trading range, reaching closer to 2022's low of $0.00000793. The descending volume shows that SHIB might bounce with the traditional market opening on Monday.
The Relative Strength Index on the chart confirms the oversold state of the asset, making a bounce a possibility if fresh buying power occurs on the Shiba Inu market. However, the current state of the industry suggests that investors avoid any kind of risk exposure. Memecoins and tokens will most likely be the first victims of the suppressed sentiment on the market.
Most likely scenario
Considering the aforementioned factors, the most likely scenario for Shiba Inu would be a continuation of the movement in the rangebound. The existing conditions of the market suggest that there is no place for Shiba Inu in investors' portfolios, and the plunge on the market we see today is yet another confirmation of this thesis.
On-chain data and a series of proof-of-reserves releases confirm that retail investors hold enormous volumes of Shiba Inu on centralized exchanges, which explains why the token is constantly having problems with gaining traction on the market.
Practically, almost every local rally on Shiba Inu is being suffocated before it starts as the selling pressure coming from retail investors immediately kills the momentum on the market, causing it to return to the start.
Alex Dovbnya
Godfrey Benjamin
