Key Insights:
- Shiba Inu price has crashed to a crucial support level.
- Shibarium total value locked (TVL) has crashed to $2M.
- Technicals suggest that the SHIB price may rebound.
Shiba Inu price continues to underperform the broader crypto market after falling for two consecutive weeks. SHIB dropped to $0.00001210 on Friday, down 65% from its December highs. Will the token continue to fall further as Shibarium loses traction?
Shibarium Growth Continues to Deteriorate
One reason for the ongoing Shiba Inu price crash was the performance of Shibarium, its layer-2 network. Launched in August 2023, the layer-2 network has not gained traction among users and developers.
DeFi Llama data shows that Shibarium has attracted only 18 applications in the last three years. These applications have a total value locked (TVL) of just $2.29 million, down from the all-time high of $7.37 million in December last year, a ~70% plunge.
Most of the value locked in Shibarium is from ShibaSwap, which has over $1.1 million, representing about 48% of its total assets. The other applications on the platform are K9 Finance DAO, and WoofSwap.
These numbers mean that the layer-2 network is struggling despite being backed by the second-biggest meme coin in the cryptocurrency industry. It has been overtaken by some of the newest layer-1 and layer-2 networks.
For example, Unichain, which was launched in March by Uniswap, has attracted 41 developers and a TVL of over $1.1 billion. The recently-launched Hyperliquid layer has accumulated over $3.96 billion in assets, a 86% monthly increase.
These numbers mean that there is demand for L1 and L2 solutions among developers and users, but Shibarium is not benefiting. More data by ShibariumScan shows that the average transaction fee has plunged to 0.000034 BONE from the July high of 0.0001060 BONE in July.
Shibarium’s activity has an impact on SHIB price in two ways. Its success may draw investors to Shiba Inu because the two are associated. Second, higher transactions and fees contribute to its deflation, as the fees are converted from BONE to SHIB and burned. With its low total fees, the impact of SHIB’s burning is not felt.
Shiba Inu Price Has Potential Tailwinds
On the positive side, Shiba Inu price has numerous catalysts that may push it higher in August this year. The first one is that there are signs that whales have continued to accumulate the coin in the past few weeks.
Shiba Inu whales now hold 40.70 billion tokens, up by 11% from the same period a month earlier. This is a notable catalyst because it is a sign that these whales expect the price to bounce back in the coming weeks or months.
The same trend has happened among the top-100 SHIB holders, who have increased their holdings by 1.37% in the last 30 days.
Furthermore, data compiled by TradingView reveals that Shiba Inu has an MVRV score of 1.2, significantly lower than its peak of 3.27 last year. A low MVRV score is a sign that the current market value is much lower than the realized score.
Shiba Inu Price Weekly Chart Points to a Rebound
The weekly chart shows that the coin has crashed to the ascending trendline that connects the lowest swings since March 2023. It has failed to move below that level several times, meaning that short-sellers are afraid of shorting below it.
Additionally, the low volatility means that the three lines of the Bollinger Bands have narrowed substantially. Historically, this performance often leads to a strong bullish breakout over time.
There are signs that the price has formed the harmonic pattern known as XABCD. This pattern is made up of several phases and is now in the final CD one. Therefore, a strong bullish breakout will likely see it jump to the B section of $0.00003185. A surge above that price will drive it to the 2024 high of $0.000046.
Shiba Inu price has fairly mixed fundamentals as its layer-2 network has failed to gain traction among developers. However, whales and smart money investors are buying, driving the supply on exchanges downwards.
It also has highly bullish contrarian indicators that may lead to a strong surge in August or later this year.
Crispus is a distinguished Financial Analyst at, bringing over 12 years of expertise in cryptocurrency markets, specializing in Bitcoin and altcoins. Renowned for his sharp insights at the nexus of market trends and breaking news, Crispus delivers actionable analysis to empower investors. His work is prominently featured across leading platforms, including BanklessTimes, CoinJournal, HypeIndex, SeekingAlpha, Forbes, InvestingCube, Investing.com, and MoneyTransfers.com, cementing his reputation as a trusted voice in the financial world.
