Once hailed as the “Dogecoin (DOGE) killer,” Shiba Inu (SHIB) is struggling to keep up with the competition as it posts one of the weakest performances year-over-year.
Although the token is among the top 25 cryptocurrencies by market cap, Shiba Inu is one of only three that are in the red on the yearly chart, together with Toncoin (TON) and Polkadot (DOT).
By comparison, Dogecoin, its meme coin rival, has surged nearly 100% over the same period.
The question for traders is thus whether Shiba Inu is dead or whether it can reinvigorate some of the demand it previously enjoyed.
Can Shiba Inu recover?
At the time of writing, SHIB was trading at a fraction of a cent, at $0.00001187, down nearly 21% the past year. Although hype once allowed it to top Dogecoin in terms of market cap, its capitalization now sits at only $6.97 billion, compared to DOGE’s $34.89 billion, which is almost seven times as much.
Nonetheless, the meme coin remains one of the most talked-about cryptocurrencies, being a risky opportunity with a community convinced their favorite asset is going to deliver extraordinary returns.
Unlike inflationary cryptocurrencies, Shiba Inu is deflationary. That is, its token-burning mechanism permanently removes coins from circulation, theoretically creating upward price pressure as supply shrinks.
However, even with hundreds of trillions of tokens burned, meaningful price appreciation remains elusive, with some of the most bullish hopes, such as those of a $1 price down the line, remain virtually impossible barring an unexpected miracle.
And yet, some investors still remain positive. Market technician Jonathan Carter, for instance, recently pointed to a descending triangle pattern on the 2D chart, with lower highs pressing against a descending resistance line and repeated retests of a key support zone around $0.00001080.
Buyers have increasingly tried to defend a slightly higher floor near $0.000012 since August, making it a critical level for SHIB’s next move.
The triangle is tightening, and for Carter’s scenario to materialize, SHIB must indeed bounce off the $0.000012 support. A breakdown below this zone, however, would invalidate the upward thesis and leave the token vulnerable to a fall back even further.
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