Shiba Inu Price Takes a Hit: Is a Short-Term Crash on the Horizon?

Shiba Inu (SHIB) has seen a significant dip of around 7% this week, and its future is now in question following a hawkish stance from the US Federal Reserve. While there’s a possibility of a near-term price crash, the long-term outlook for the meme coin could still be strong.

Here’s a breakdown of what’s been happening with Shiba Inu’s price and what investors can expect moving forward.

Shiba Inu Price Dips Amid Market Turmoil

The Shiba Inu (SHIB) price was hit hard on Wednesday, falling about 7%, as the broader meme coin market experienced a sharp downturn. This drop occurred after the US Federal Reserve’s recent policy announcement, which played down the prospect of substantial rate cuts in 2025, denting investor sentiment across various financial markets.

The Fed’s decision to reduce interest rates by just 25 basis points (bps) came as expected, but the central bank’s caution regarding future rate cuts left many traders feeling uneasy. This uncertainty spilled over into the highly speculative meme coin market, with the total market cap of meme coins dropping from $117 billion to $106 billion, according to CoinMarketCap.

Despite the immediate price dip, crypto bulls are holding out hope for a market rebound before the end of the year. Much of this optimism is rooted in the incoming Trump administration, which is expected to be more crypto-friendly than the outgoing Biden administration. Additionally, the growing global adoption of cryptocurrencies and the potential establishment of Bitcoin strategic reserves in multiple nations provide fertile ground for a possible meme coin rally — with Shiba Inu poised to lead the charge.

Bearish Chart Developments: Is Shiba Inu Heading for a Crash?

Despite the long-term optimism surrounding Shiba Inu, the short-term price chart is raising some red flags. The recent drop in SHIB has caused it to fall below its 50-day moving average (50DMA), after it had already slipped under its 21-day moving average (21DMA) earlier this month.

Adding to the bearish sentiment, SHIB has now broken out of an upward trend channel that had been intact since mid-November. This technical breakdown suggests that the Shiba Inu price could continue its descent towards the next major support zone, which lies around $0.00002160 — an additional 11% decline from current levels.

But while things are looking rough in the short term, a full-blown crash would only become a real threat if SHIB were to break below its uptrend that began from the summer 2024 lows. If that happens, the next major level of support would be the 200DMA below $0.000019, potentially signaling an even deeper correction.

Why Shiba Inu Investors Shouldn’t Panic

Despite the concerning short-term chart, there’s no need for panic just yet. Yes, the Fed’s reluctance to lower interest rates as much as the market had hoped could dampen overall market sentiment, but this isn’t the death knell for cryptocurrency, nor for Shiba Inu specifically.

As mentioned earlier, the crypto market is on the brink of entering a new golden age, thanks to the incoming pro-crypto Trump administration and the growing global adoption of Bitcoin. While Bitcoin may be the primary beneficiary in the early stages, this trend will eventually trickle down to other parts of the crypto market — including altcoins and meme coins like Shiba Inu.

Shiba Inu has one of the largest and most dedicated communities in the meme coin space, alongside a rapidly growing web3 ecosystem. These factors position SHIB well for long-term demand, even in the face of short-term volatility.

A Golden Opportunity for Patient Investors

For investors willing to ride out the turbulence and hold through the near-term dips, Shiba Inu’s price fluctuations may actually present an opportunity to accumulate. While the short-term outlook is cloudy, the long-term potential for Shiba Inu remains bright, especially as the broader crypto market begins to recover.

So, while the near future may be rocky for Shiba Inu, the meme coin remains a high-potential asset in the long run. Investors with the stomach for short-term volatility could find themselves in a strong position when the market eventually rebounds.

Conclusion: Shiba Inu Faces Short-Term Struggles but Long-Term Promise

The recent drop in Shiba Inu’s price has raised questions about its immediate future. However, while the short-term outlook is uncertain due to the broader market correction and bearish chart signals, the long-term prospects for Shiba Inu remain solid. With global crypto adoption accelerating and a potentially crypto-friendly US administration on the horizon, Shiba Inu could once again lead the charge when meme coins return to favor.

For investors with a long-term perspective, Shiba Inu’s current dip could be the perfect opportunity to buy into the meme coin while prices are lower. As always, patience may reward those willing to weather the storm.