Bad news for Shiba Inu Bulls? Here’s why SHIB’s price could drop soon

TL;DR

Shiba Inu (SHIB) has fallen 13% in the past week, and analysts suggest it could fall further, but rally in the long term. The poor performance of the Shibarium L2 blockchain solution, with declining transactions and accounts, may negatively affect the price of SHIB. Where is SHIB headed?

The popular meme coin, Shiba Inu (SHIB), has underperformed this past week, with its price falling roughly 13% (according to data from CoinGecko). According to some industry participants, the downward trend could intensify in the short term.

An X user stated that SHIB’s valuation remains in a “neutral zone” as long as it continues to trade in the range of $0.0000185 to $0.0000164. However, the analyst assumed that it could drop to $0.000015 if the major resistance level of $0.000017 is missed. Remember that the price briefly dipped below this level several hours ago.

“It is difficult to define a direction in the long and medium term, but zooming in on the third chart, I see a possible bearish triangle,” the trader added.

On the other hand, the analyst predicted that SHIB is poised for a long-term recovery, but is “currently stuck in a fairly neutral zone,” making it a “difficult coin” to trade yet.

“I recommend that you wait for the lower levels to be tested before entering a long position. Sometimes it is better to watch than to trade,” they concluded.

Other analysts have been more bullish and have set bullish price targets for SHIB. In April, X user Rekt Capital suggested that the meme coin’s valuation could soar by triple digits if it broke above the $0.000033285 resistance level. It is worth noting that the last time SHIB traded this high was in March this year.

The Fall of Shibarium

Another factor that hints that SHIB’s price could continue to suffer in the coming days is the poor performance of the Shibarium layer 2 blockchain solution.

The protocol only processed 2,310 daily transactions on July 23, which is an 83% drop from the figure seen at the end of June. The number of active accounts, new contracts and new verified contracts has also headed south.

The L2 scale solution went live less than a year ago, with the goal of handling more transactions per second, reducing congestion and improving overall network performance. As such, some industry participants believe that its subsequent progress could positively affect SHIB’s price.

Shibarium has undergone some major updates in recent months, including the release of a new user interface (UI) update. The development enables compatibility with popular self-cussion wallets, such as MetaMask, Coinbase Wallet, and Trust Wallet.

For more updates on the ecosystem, be sure to check out our Shibarium News.

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