Key Takeaways:
- Shiba Inu coin has dropped 30% since mid-August.
- The BARR formation may push the token lower.
- Could Shibarium activity save it from bears?
YEREVAN (CoinChapter.com) — Shiba Inu (SHIB) has crashed nearly 30% from its local top of $0.00001134 in August 2023. And it appears the memecoin could suffer more given it has entered the breakdown stage of its prevailing Bump-and-Run-Reversal (BARR) pattern.
Bump and Run Reversal Setup At Play for SHIB
As the name implies, the Bump and Run Reversal (BARR) is a bearish reversal pattern. It forms after excessive speculation, or hype drives the asset’s price up “too far, too fast.”
Interestingly, the pattern was originally named the Bump and Run Formation, or BARF. However, the developer, Thomas Bulkowski, decided that Wall Street did not possess the necessary sense of humor for such an acronym and changed the name to Bump and Run Reversal.
There are three main phases to the setup: lead-in, bump, and run, as seen in the chart above. Shiba’s lead-in was in progress from the bottoming out in mid-June up to late July.
Then, the bump phase followed, where SHIB took off on the Shibarium launch hype and reached the local top of $0.0000113 on Aug. 12. After the hype died down, SHIB followed suit with a 30% plunge. Moreover, judging by the dropping trading volumes, the Shiba Inu coin might have fallen further.
According to CoinMarketCap, the SHIB trading volumes shot to $100 million on Sep. 5 after a 13% daily spike, which is not necessarily bullish. A rise in trading volumes, combined with a price slide, could indicate a selloff.
However, the latest developments on the Shibarium front could help elevate the coin.
Shibarium Activity a Plus
As per Shibarium testnet explorer Puppyscan, the Shibarium testnet crossed a “key benchmark,” processing close to 39 million transactions. The number of wallets involved has also increased to approximately 17.08 million, and with 2.3 million blocks, the average block time stood at 5 seconds.
Notably, on Aug. 5, the transaction count stood at just over 100,000 transactions and dropped to nearly ten the next day, accompanied by a SHIB price drop.
However, there was a dissonance between the on-chain activity and the price action in the coming days. The noted downtrend in transaction volume persisted until Aug. 10, but the price soared, indicating a possible market manipulation.
Furthermore, Puppyscan indicates a drop to zero on Aug. 14 and 15, when the community had doubts about Shibarium. The transaction volume picked up since, but the SHIB price never recovered.
Can the Shiba Inu team convince its followers to join up again? While the uptrend is not a given, SHIB price remains dependent on crypto market fluctuations and, as a true memecoin, is more volatile than the rest of the top twenty digital assets.
