Shiba Inu (SHIB) Risks Losing More Than Ever

Shiba Inu is encountering a pretty problematic market period. The downside risk might be greater than most people realize, given a recent significant hack on its Shibarium network and concerning on-chain metrics.

Fallout and hack

SHIB’s Layer-2 scaling solution, Shibarium, was compromised earlier this month through a flash-loan attack that compromised validator keys. The attacker took over 10 of the 12 validators and, among other tokens, depleted 92 billion SHIB and 224.57 ETH. Asset recovery is uncertain, and the bridge connecting assets in and out of Shibarium is still halted. The confidence of investors has been shaken by this incident. SHIB and other meme coins saw a steep decline in value in the hours following the exploit.

In addition to the hack, netflow data is negative, particularly from big holders. The fact that large-holder netflows are now negative suggests that whales are trimming or leaving their positions rather than building up. A generally negative exchange netflow, on the other hand, indicates that more SHIB is being taken out of exchanges than deposited. This is frequently interpreted as a sign of bullish accumulation, but in this instance, it may be a cover for declining buyer demand and growing uncertainty.

SHIB moving averages plummet

According to price chart analysis, SHIB is having trouble regaining moving averages as support and is trapped in a triangle or consolidation below resistance zones. The 50, 100 and 200-day EMAs serve as barriers because they are grouped above the current price levels. Recent price action shows that those zones have been rejected, and the support level between $0.0000128 and $0.0000130 has not been maintained. Should support fail, SHIB may plunge precipitously, possibly returning to the $0.0000110-$0.0000100 range (also known as adding a zero), which would be a significant loss for investors.

Exchange netflow and whale wallet activity should be regularly monitored, persistent large-holder withdrawals would raise concerns. If SHIB can convincingly recover moving averages, that would be a bullish pivot, but it is not likely at this time. Exercise caution, because there is still latent selling pressure, even with negative netflow.