SHIB Could Lose 20% More to $0.0000060

The ongoing downtrend displayed by the Shiba Inu price action may gain momentum with the support on the downside being relatively weak. SHIB may find a breathing space around the $0.0000060 psychological level. However, if the market finds a catalyst from the recent announcement regarding the development of a SHIB burn portal, the meme coin could rise toward $0.0000080.

Shytoshi Kusama Confirms Burn Portal on Shibarium

Shytoshi Kusama, a Shiba Inu lead developer, has confirmed the development of a “Burn Portal” on the project’s Shibarium protocol. This announcement comes as Shubarium continues to gain traction following the successful launch of its mainnet in mid-August.

Shibarium is a Layer 2 network powered by SHIB tokens and built atop the Ethereum blockchain. According to the Shiba Inu ecosystem blog, this layer “aims, as a protocol, to work on top of existing blockchain networks, allowing for faster, cheaper, and more private transactions to be processed off-chain, while still relying on the security of the underlying blockchain.”

Kusama confirmed the development of the Burn Potal on Telegram as a response to a SHIB community member about the portal. A screenshot of the Telegram conversation was shared in a post on X by Lucie, a renowned SHIB influencer.

So to confirm that ADOPTION is the right way🌝$SHIB Burns x Shytoshi answered pic.twitter.com/BizkLZ0V83

— 𝐋𝐔𝐂𝐈𝐄 | Summer of Shibarium (@LucieSHIB) September 4, 2023

Burning tokens is a fundamental mechanism within the Shiba Inu protocol, where SHIB tokens are consistently burnt. This means they are sent to a dead wallet where they can never be accessed. The burns are designed to help increase the value of SHIB by reducing the amount of tokens in circulation.

Shiba Inu’s Upside is Capped at $0.0000080

If the SHIB army reacts positively to this development within the Shiba Inu ecosystem, they could buy more of the tokens in anticipation of future gains. The increasing buying pressure could see SHIB turn up from the current levels to tag the $0.0000080 psychological level. This would represent a 6.88% increase from the current price.

SHIB/USD Daily Chart

However, this is where the upside could be capped for the Shiba Inu price. Note that both the 50-day and 200-day Simple Moving Averages (SMAs) were positioned in this zone. This implied that supplier congestion within this region is likely to curtail any recovery attempts.

The stiffness of the resistance at this level is reinforced by on-chain metrics from IntoTheBlock. Its Global In/Out of the Money (GIOM) model shows that SHIB faces stiff competition around the $0.0000080 area. This is where approximately 301.57 trillion SHIB tokens are currently being held by 433.62 addresses.

Shiba Inu GIOM

Any attempts to push the token above this price could be met by immense selling from this cohort of investors who may wish to breakeven.

SHIB Price at Risk of 20% Losses

Shiba Inu is trading at $0.00000749, down 3% on the day and 8% over the last week. The dog-themed token is also trading 23% below its price 30 days ago. The technical setup shows that the downtrend could continue in the near-term.

Note that the moving averages have just sent a call to sell SHIB on the daily chart. This happened during the early Asian trading sessions on Tuesday when the 50-day SMA crossed below the 200-day SMA, suggesting that the market conditions still favored the downside.

The Relative Strength Index (RSI) was also moving within the negative region. Its value at 35 suggested that the bears were firmly controlling the Shiba Inu price.

As such, a daily candlestick close below $0.0000075 could see SHIB drop first toward $0.0000070 and later toward the $0.0000060 psychological level. This would bring the total losses to 19.96%.