Why Did Shiba Inu (SHIB) Price Drop After the Shibarium Launch? Long-Term Predictions Remain Bullish
Shibarium, the highly anticipated Layer 2 solution for the Shiba Inu ecosystem, has finally launched. However, the price of SHIB curiously did not react positively to this long-awaited development initially. In the 24 hours following the launch, SHIB’s price declined by almost 7% and was trading around the $0.000009 mark.
This price action seems counterintuitive given the potential benefits Shibarium offers. The Layer 2 solution, built on top of Ethereum, aims to significantly improve transaction speeds and reduce gas fees. Some of the key features of Shibarium include:
- Faster transaction processing times
- Greatly reduced gas fees compared to transacting directly on Ethereum
- Support for EVM compatibility allowing projects to easily port over from Ethereum
- Unique “doggy” DAO system for governance
Despite the lackluster short-term price movement, Shibarium is likely very positive for SHIB in the long run. By improving scalability and reducing fees, Shibarium makes SHIB more usable and attractive for various decentralized apps and services to build on top of. This could lead to increased utility and demand for SHIB down the line.
Doge2014 raises 450K in days celebrating Dogecoin. Make potentially big profits and get in on exclusive airdrop!
Show more +Looking at the momentum indicators:
- Momentum is Bullish but inflecting. MACD Line is above MACD Signal Line and RSI is above 55 but momentum may have peaked since MACD Histogram bars are declining, which suggests that momentum is weakening.
- Support and Resistance: Nearest Support Zone is $0.0000080 (previous resistance), then $0.0000055. The nearest Resistance Zone is $0.0000100, which it broke, then $0.00001200.
Source: CoinStats
During the period before the launch of Shibarium, the momentum was bullish for SHIB since the price surged by 30%. However, looks like the big investors are currently performing a profit-taking process, so the price might enter a consolidation phase, before the next leg up.
In summary, the launch of Shibarium is an exciting development that improves the SHIB ecosystem’s technical capabilities. The muted price reaction so far does not negate its long-term benefits. SHIB still shows some bullish momentum indicators, but momentum may be slowing in the very short term. Key support and resistance levels to watch are $0.0000080 and $0.0000100. Overall, Shibarium offers plenty of reasons to remain confident in SHIB’s future outlook despite recent price volatility.
You can view our Shiba Inu (SHIB) price prediction here.
We recommend eToro
Wide range of assets: cryptocurrencies alongside other investment products such as stocks and ETFs.
Copy trading: allows users to copy the trades of leading traders, for free.
User-friendly: eToro’s web-based platform and mobile app are user-friendly and easy to navigate.
