Shiba Inu Faces Decline: Investor Confidence Wanes After October Rally

Shiba Inu (SHIB) saw a significant uptick in October, gaining around 10% in value. However, early signs now suggest that this momentum may falter in November. The number of Daily Active Addresses (DAA) for SHIB, which reflects user interaction, has dropped by 20%, indicating waning interest. Historically, this decrease in DAA has correlated with price drops, suggesting SHIB may be set for a correction if this trend continues.

Adding to these bearish signs, data indicates that SHIB’s average holding time—how long investors keep their SHIB coins before selling—has also shortened recently. This trend reveals that more holders are selling SHIB instead of holding on for potential gains, a signal of lowered investor confidence. This selling pattern could increase downward pressure on SHIB's value if the decline in engagement persists, as sellers outnumber buyers.

Despite some optimism generated by SHIB's brief breakout from a descending triangle pattern in late October, the price has since fallen back within this bearish formation. This situation, often referred to as a "fakeout," occurs when a breakout above a resistance level fails to hold, trapping optimistic buyers and forcing a quick reversal. With the Relative Strength Index (RSI) also declining, bullish momentum appears to be fading, making further declines more likely.

While there is a risk that SHIB could test lower support levels, a renewed breakout above the descending triangle could still offer a path for gains. However, downside risks appear more pressing as November progresses. Investors may need to brace for potential losses if SHIB's price does not regain upward momentum soon.