Red alert as Shiba Inu price forms two potentially risky patterns

Shiba Inu (SHIB) has been under significant pressure lately, struggling to keep pace with other popular meme coins in the market. The token recently dropped to a key support level at $0.000020, marking its lowest price point since December 20, 2024. As a result, there are growing concerns that the SHIB price may soon experience a substantial bearish breakdown.

One of the most concerning signals for Shiba Inu is the formation of a death cross. This occurs when the 50-day moving average (MA) crosses below the 200-day MA, signaling a potential long-term bearish trend. The gap between these two averages has been steadily narrowing, with the previous death cross in June 2024 leading to a steep price drop of over 40%, from $0.000017 to a low of $0.000010. While the market has seen recovery after previous crossovers, the looming death cross raises the risk of further downward movement for Shiba Inu, especially if history repeats itself.

Adding to the bearish outlook, Shiba Inu has formed a double-top chart pattern. This pattern, marked by two peaks at $0.00002488, and a neckline at $0.00001970, is another typical bearish reversal signal. A confirmed breakdown below the $0.00001788 support level would likely trigger more downside, with potential targets near $0.00001192, a key support level according to Murrey Math Lines.

On top of these technical indicators, Shiba Inu’s fundamentals are also under strain. The SHIB burn rate, which had previously been a source of optimism, has fallen dramatically. According to data from IntoTheBlock, the number of new and active addresses for Shiba Inu has dropped by 27.5% and 25%, respectively, in the past week. This suggests a declining interest in the token, potentially as traders look to newer meme coins like Fartcoin and Official Trump.

Moreover, the daily SHIB burn rate has plummeted by almost 94%, with only 656,468 SHIB coins worth around $15 burned on Sunday. This sharp decline is likely due to a slowdown in Shiba Inu’s Shibarium layer-2 network. The average transaction fee on Shibarium has decreased from 0.0003 BONE to 0.0001 BONE since November, and the total BONE spent on gas fees has also been on a downward trend, indicating that network activity is slowing down.

This lack of growth in Shiba Inu’s ecosystem is compounded by the fact that several newer meme coins have surpassed SHIB in terms of daily volume. For example, Official Trump amassed $4.56 billion in daily volume, while Pudgy Penguins and Fartcoin recorded $188 million and $226 million, respectively. In contrast, Shiba Inu’s daily trading volume stood at only $160 million, signaling that investors are rotating their capital into fresher, more popular meme coin projects.

Given the combination of technical patterns, weakening fundamentals, and growing competition from newer meme coins, Shiba Inu appears to be at a precarious juncture. Investors will need to closely monitor the coin’s price action, as a failure to hold the $0.00001788 support level could lead to further declines, with the $0.00001192 support as the next key target