- Cryptocurrency market in recovery mode
- SHIBUSD down 15%
- Shiba Inu Shibarium update
The broader cryptocurrency market has been in recovery mode over the past month. Double-digit percentage price gains have coincided with an uptick in risk-on mood in the capital markets. Shiba Inu is one of the coins that have posted solid gains. However, the move higher appears to have stalled.
SHIBUSD technical analysis
After a 37% rally in March, SHIBUSD is down by about 15% in April as the emerging uptrend remains under pressure. Bulls have struggled to steer the meme coin above the $0.000030 level with short selling pressure gathering steam in recent days.
The coin correcting to the 200-day moving average should raise concerns. A close below the moving average and the $0.00002395 level could fuel another leg lower despite the long-term downtrend. The Relative Strength Index is another indicator hinting at a potential build-up in selling pressure.
The RSI has already corrected below the 50-level affirming short sellers are in control as the bull’s struggles persist. A drop below the $0.00002395 level could result in SHIBUSD correcting to lows of $0.00002120. On the flipside, SHIBUSD needs to find support above the $0.00002395 support level to have any chance of edging higher in continuation of the emerging uptrend
Why is Shiba Inu under pressure?
Shibarium update concerns
Last year, Shiba Inu was one of the best performing cryptocurrencies, rallying by a whopping 46,000,000%. Since hitting its all-time highs in October of last year, the coin has come under pressure giving up 69% of the gains.
The losses coincided with a massive correction in the cryptocurrency market that saw a good number of coins correct from all-time highs. In recent weeks, the coin has shown signs of bouncing back as investors react to reports developers are privately testing layer-2 blockchain Shibarium.
The proposed upgrade, once implemented, is expected to boost Shiba Inu blockchain processing speeds and lower transaction fees. The update is also expected to strengthen the network’s edge around non-fungible tokens as it also looks to pursue gaming ambitions with the rollout of a metaverse.
While the upgrade is a big deal, uncertainty over when it will come into effect has been one of the biggest undoing that has affected SHIBUSD sentiments. There are also growing concerns about whether the update will work as intended, which further raises concerns about Shiba Inu NFT-based gaming ambitions.
Lack of competitive edge
The Shibarium update is not the only tailwind affecting SHIBUSD sentiments in the market. Shiba Inu’s price has traded as a meme coin for the longest time, whose price has been a factor of speculation, pumping, and dumping in the cryptocurrency sector.
The lack of clear competitive advantages has disadvantaged it compared to other blockchain projects with unique features. As it stands, Shiba Inu is one of the many ERC-20 coins built on the Ethereum blockchain with the aim of enhancing payments. As it stands, only 648 merchants accept Shiba Inu as a mode of payment from a pool of more than 500 million entrepreneurs.
The cryptocurrency payment sector is overcrowded with projects with additional unique features. Unlike other projects, Shiba Inu does not have an edge in developing smart contracts and decentralized applications. It is also yet to have an impact on decentralized finance.
Shiba Inu faces an unprecedented future as a meme coin. The lack of competitive advantages to compete against Ethereum, Solana, Cardano, and the likes could see the coin remain under pressure until it carves a niche for itself around non-fungible tokens or the metaverse world.