Shiba Inu (SHIB) has shed 4.4% of its value in the past 7 days as cryptos took a breather following the Federal Reserve’s decision to cut interest rates by 25 basis points.

Meme coins as a whole have experienced a downturn during this period, and SHIB is actually not among the worst-performing tokens in this category during this period. However, on a year-to-date basis, its performance has been underwhelming, as it has produced a 45% loss.

More exotic tokens like MemeCore ($M), Fartcoin ($FARTCOIN), and Pudgy Penguins ($PENGU) have taken the spotlight most of the year and have managed to climb the ladder rapidly.

Looking at on-chain data, exchange reserves have been dropping sharply since the year started as the price went down from $0.000030 to $0.000011, favoring a bearish Shiba Inu price prediction.

Although this could indicate that participants are opting to store their assets in external wallets, it could also mean that demand for this token is declining.

Exchange reserves alone don’t tell the entire story. This metric has been declining for a couple of years now, but that January drop is steep enough to be considered important.

We can see that traders’ interest in SHIB since January has been steadily declining, meaning that this downtrend in reserves is not necessarily the result of an increase in long-term holders but rather the result of a drop in the market’s interest in SHIB. This favors a bearish outlook for the token unless sentiment shifts at some point.

Shiba Inu Price Prediction: SHIB Could Drop To $0.000010 If It Loses This Support

Looking at the daily chart, SHIB has once again dropped to the $0.000012 support area and has been making a series of lower highs, meaning that a downtrend is in play.

Going back to this demand zone means that the market has not found willing buyers at higher prices and has been forced to push the token back to this level in search of liquidity.

Hence, if the token does not bounce strongly off this area and breaks above the 200-day exponential moving average (EMA), the odds favor a push to $0.000010. This implies a 15% downside potential in the near term.

The Relative Strength Index (RSI) favors a bearish outlook as well, as it is on a downtrend and seems poised to reach oversold levels. When this happens, it implies that negative momentum is accelerating.

In contrast, if SHIB experiences a strong bounce off this key support area and breaks above the trend line resistance shown in the chart, it means that buyers have been found, and this could lead to a full-blown reversal.

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