Shiba Inu has continued to face increasing selling pressure following the launch of the Layer 2 scaling protocol, Shibarium. The second-largest meme coin had rallied for nearly two months starting in July, as the SHIB community prepared for a game-changing rally after the launch of Shibarium.
Contrary to their expectations, the new Ethereum Layer 2 protocol ran into headwinds a few hours after the launch, raising questions about the security of the network. As reported, the hiccups forced the team to take the Shibarium network offline, before bringing it back online, although in private mode.
According to an update issued by the SHIB ecosystem’s lead developer Shytoshi Kusama on Sunday, the team is taking the opportunity to focus on enhancing security while conducting “deep testing on the blockchain.”
“We will continue scaling and testing in anticipation of working with our new (yet old) frens on Monday, ahead of re-opening the chain to the public. I’ve asked the devs all to rest tonight/today so everyone is refreshed,” Kusama said via a blog post update.
Shiba Inu Sell-Off Intensifies
Investors in SHIB are anxiously watching as declines wipe out their holdings due to the embattled Shibarium launch. Those able to absorb the losses hope that a rebirth of the Layer 2 scaling protocol would turn their holdings profitable. However, with the prevailing market conditions, the expected rally to $0.00002 is highly unlikely.
Shiba Inu is trading at $0.00000791 at the time of writing after facing rejection from a four-month high of $0.00001135 on August 12.
All the applied indicators, including moving averages like the 50-day Exponential Moving Average (EMA) (red), the 100-day EMA (blue), and the 200-day EMA (purple) support a bearish outcome, where SHIB price may extend the losses 10% down to the lower descending trendline around $0.00000705.
Insight from the Moving Average Convergence Divergence (MACD) indicator reveals the possibility of a continued downtrend, where Shiba Inu explores price levels toward support at $0.000006 and $0.0000053, respectively.
Is A SHIB Price Rebound Possible?
Shiba Inu’s fate lies with the success of the Shibarium protocol, which developers are trying to save. Another failed restart could mark the end of SHIB with losses likely to take the token to zero.
Nevertheless, the situation is not entirely bad for Shiba Inu, especially when longer timeframes are considered. For example, the MACD maintains a relatively bullish outlook on the weekly chart. If bulls manage to prevent the momentum indicator from validating another sell signal, a recovery could begin toward $0.00001.
Support at $0.0000078 although being tested now, is reinforced by the lower descending trendline. Arresting the selling pressure at this level would imply that bears are giving up control and that bulls are ready to take the mantle and push for a rebound.
Investors looking forward to a rally in SHIB would be in a better position if the price successfully takes on resistance at the 50-weekly EMA (red) and the upper falling trendline. Such a breakout may confirm the beginning of a bull run where the $0.00002 target would be extremely conservative.