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Shiba Inu’s price tumbled below $0.00003 on March 12, and vital on-chain metrics suggest the consolidation phase could linger.
After a blistering 300% rally that saw SHIB‘s price claim a three-year peak of $0.00004 on March 9, the memecoin mania appears to be cooling off. On-chain data trends provide insights into key metrics that could impact Shiba Inu price action in the near term.
20,000 SHIB long-term holders exit amid profit-taking spree
The memecoin sector has been on a tear over the past 30 days, with PEPE, Dogecoin (DOGE), BONK, and Dogwifhat (WIF) taking turns to dominate the crypto top-gainers charts.
Shiba Inu price was not far behind, soaring 420% from $0.000009 on Feb. 4 to a three-year peak of $0.00004 on March 5.
As bullish swing traders enjoyed triple-digit gains, the rally also meant that many long-term holders who had acquired SHIB the last time prices reached these levels in 2021 also became profitable again.
Based on the recent on-chain data trends, many long-term SHIB holders have capitalized on the rally to exit their positions at favorable prices.
IntoTheBlock’s addresses by time-held metric tracks the number of wallets that have held all their unmoved for one year or more.
As seen above, the number of SHIB long-term holder addresses stood at 1.03 million as of Feb. 29. But at press time on March 13, that figure has rapidly dropped for 1.01 million addresses, indicating that 20,000 SHIB long-term investors have offloaded their token in March.
The timing suggests that the long-term holders began to take profits in early March, just as Shiba Inu’s price broke above the two-year resistance at $0.00003.
Shiba Inu network transactions declined 81% over past week
Long-term investors are crucial to the stability of any blockchain network. It not only dilutes market supply but also sends far-reaching bearish signals to other existing investors and discourages potential new entrants.
In affirmation of this bearish outlook, Shiba Inu has experienced a significant dip in network activity over the past week.
The CryptoQuant chart tracks the daily count of confirmed transactions executed on the Shiba Inu network.
The latest data shows that the Shiba Inu network recorded 16,335 total transactions on March 12, a whopping 81% decline from the 87,054 transactions recorded on March 5 during the thick of the SHIB price rally.
A decline in transaction count reflects lower demand for products and services hosted on the blockchain network.
When the level of network activity decouples negatively from an asset’s price uptrend, as observed above, the rally could soon grind to a halt as the native token struggles to find new demand.
Shiba Inu price prediction: The $0.00003 support is at risk
Shiba Inu’s price is facing significant pressure as it exceeds $0.000032. The Parabolic SAR indicator, currently at $0.000045, indicates the potential for further downward movement in the near term.
If selling pressure intensifies, the 20-day Simple Moving Average (SMA), at $0.000024, may offer initial support, but a breach of this level could open the doors to a deeper correction.
Despite the declining network demand, SHIB’s price could hold above $0.000030 if swing traders and bullish speculators remain active in the short term. In that case, a decisive breakout above the Upper Bollinger Band resistance at $0.000043 could signal a shift in sentiment towards a more positive outlook.
This article first appeared at crypto.news
