Main navigation

Shiba Inu's Profitability at 13%, Here's What Happens If It Drops Below 10%

Fri, 12/23/2022 - 12:01
article image
Arman Shirinyan
Shiba Inu's profitability nowhere near 'average' values as token might face some problems if price dives further
Shiba Inu's Profitability at 13%, Here's What Happens If It Drops Below 10%
Cover image via stock.adobe.com

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available.

Read U.TODAY on
Google News

The profitability of the most popular meme coin on the market is plummeting continuously as the risk demand in the industry is not recovering, and meme assets are not seeing any new inflows. But real problems may occur after SHIB's profitability drops below the 10% threshold.

Usually, the profitability of an asset itself does not have any direct effect on market value. Depending on the state of an asset, investors may take profits more actively when the asset's profitability reaches values close to 90% and, in contrast, buy more when the majority of holders are at a loss.

SHIB Chart
Source: TradingView

However, there are certain thresholds after which the value of tokens or coins may take a stronger hit as a large layer of investors will enter a panic sale mode, especially ahead of major events like Christmas.

Shiba Inu might not become an exclusion as it has been moving in the downtrend for the last 18 days, showing that short-term sentiment among investors is not great, and a further drop in profitability might launch a chain of large sales that would push potential investors even further.

Related
Here's Unique New Feature on Cardano: Details

However, low profitability can sometimes be a positive factor that acts as a bullish factor that shows investors how profitable their potential positions might be in the future. Simply put: the metric acts as an oversold/overbought indicator in certain cases.

In general, Shiba Inu, Dogecoin, BabyDoge and other meme assets are in a complicated state nowadays. No retail or institutional investor is ready for exposure to extreme volatility, yet shallow assets that do not bring any real value to the world or have any use case other than payments.

article image
About the author

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.

Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.