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Shiba Inu is sinking further below $0.00001, contrary to investor expectations of a rally brewing following the launch of the anticipated Ethereum Layer 2 protocol, Shibarium. Down 8%, SHIB is trading at $0.00000908 on Thursday, with the possibility of revisiting lower support levels at $0.0000075 and $0.0000065, respectively.
Shibarium Mainnet Launch Fails to Trigger Shiba Inu Rally
Shiba Inu has since mid-June sustained a positive outlook, with the price climbing from $0.000006 to August highs of $0.00001130. As the launch of the Shibarium mainnet protocol approached, investors booked positions propping SHIB for a rally.
With declines characterizing Shibarium’s launch, it can be deduced that the event had been priced and with profit taking waiting to happen.
The situation was made worse by technical issues that emerged following the protocol’s release. Information shared by Colin Wu, a Chinese crypto reporter indicated that the Layer 2 solutions protocol had suddenly stopped producing blocks and was pending. Citing data from Beosin monitoring, Wu said that “$1.7 million in ETH is locked on the Shibarium cross-chain bridge.”
According to Beosin monitoring, the transaction on Shibarium, Shiba Inu's Layer 2 solution, is in a pending state. Currently, $1.7 million in ETH is locked on the Shibarium cross-chain bridge. Users are advised to temporarily stop using Shibarium. During the Shibarium testnet,…
— Wu Blockchain (@WuBlockchain) August 17, 2023
The SHIB community was particularly perturbed by the news, especially following a successful test run that saw testnet achieve an impressive milestone of 21 million wallet addresses.
According to a CoinGape report, Shibarium went back online, although briefly. Blocks count data reveals that the protocol’s last transaction occurred approximately five hours ago. Meanwhile, developers are working on a recovery process for the assets stuck on the bridge.
The community fears that the challenges Shibarium faces could be the tip of the iceberg with security, safety, and scalability problems likely to follow. Investors have been advised by Beosin to avoid the Shibarium protocol until the issues are resolved.
Shiba In Bleeding – A Buy The Dip Opportunity
The issues plaguing Shiba Inu, although not micro, are leaving the meme coin vulnerable to losses. Moreover, investors are likely to continue selling as a way of protecting the gains accrued over the last few weeks from being wiped out.
Reports in the market suggest most of the selling pressure is coming from whale activity in SHIB, LEASH, and BONE tokens.
The path with the least resistance will likely remain to the upside, with the Moving Average Convergence Divergence (MACD) indicator showing a new sell signal. Traders who may be seeking exposure to short positions in SHIB would be looking out for the price to drop below initial support at $0.000009, validated by the MACD line in blue crossing below the signal line in red.
There’s the possibility of Shiba Inu bouncing off the confluence support created at $0.000008724 by the 50-day Exponential Moving Average (EMA) (red) and the 100-day EMA (blue). However, if losses continue undeterred investors may want to acclimatize to SHIB retesting lower support areas at $0.0000075 and $0.0000065.
It is also premature to rule out a potential rebound, with Shiba Inu presenting buy-the-dip opportunities for another attempt at the rally to $0.00002.
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