Shiba Inu Price Forms Risky Pattern as Smart Money Sell, Burn Rate Falls

Shiba Inu price crawled back this week, moving from this month’s low of $0.0000075 to $0.0000091, a 13% rebound. However, the SHIB token will likely resume the downward trend after forming the risky descending triangle pattern and as smart money investors dump their tokens.

Shiba Inu Price Has Formed Notable Bearish Patterns

Shiba Inu price has been in a strong downward trend this year, underperforming most coins like Bitcoin, Ethereum, and Solana. It has plunged by 60% this year, while Ethereum and Bitcoin have dropped by 13% and 7.90%, respectively.

The ongoing drop mirrors that of other popular tokens like Pepe, Dogwifhat, and Bonk, which have all dropped by double digits.

Technicals suggest that SHIB token has more downside now that it has formed a descending triangle pattern. This pattern is composed of a horizontal support, which, in this case, is located at $0.00001036.

It is also characterised by a descending trendline that connects an asset’s lower highs. In Shiba Inu‘s case, this trendline connects the highest swings in May, July, and September this year.

The price target of a descending triangle is estimated by measuring the distance of the widest part and then the same distance from the lower side. In this case, the widest part is about 70%. Measuring the same distance from the pattern’s lower side yields a target of $0.00000297, which is ~67% below the current level.

The alternative scenario is where the coin formed a break-and-retest pattern by retesting the lower side of the triangle at $0.00001036. This performance is known as a break-and-retest pattern and is known for confirming breakouts.

The bearish outlook will be invalidated if it moves above the important resistance level at $0.000012.

Shiba Inu price chart | Source: TradingView

Smart Money Investors are Dumping SHIB Token

Shiba Inu price has numerous bearish catalysts that may drag if lower in the coming weeks on top of its weak technicals.

This explains why smart money investors are actively selling their tokens. Data compiled by Nansen shows that these investors sold 260 million tokens on November 24.

The selling happened after these investors went for months without buying or selling Shiba Inu tokens. As such, by selling these tokens, there are signs that these investors have started to capitulate.

This is notable as smart money investors are known for their expertise in identifying trends early.

At the same time, whale investors have remained on the sidelines in the past few weeks. They hold about 90.46 billion tokens, a level they have remained in the past few weeks.

In most cases, crypto analysts recommend buying tokens when whale and smart money investors are accumulating.

SHIB Burn Rate Plunged on Friday

Meanwhile, third-party data show that the amount of Shiba Inu coins being burned continued to fall on Friday.

Approximately 6.5 million coins, valued at around $51 million, were burned today. This burn was led by two investors, who moved over 1 million to a burn address each. Data shows that over 410 billion tokens have been incinerated since its inception.

Still, it is hard to identify a correlation between Shiba Inu token burns and its price. Indeed, the coin has continued to fall in value over the past few years as millions of tokens have been removed from circulation.

Shiba Inu price has been under pressure this year as demand has remained in the red. This decline will likely continue accelerating as it has formed a descending triangle pattern. It has also remained below all moving averages and the Supertrend indicator.

Additionally, whale and smart money investors have continued selling their tokens over the past few months. Therefore, the most likely Shiba Inu price forecast is highly bearish.