Expect Further Shiba Inu Price Pull Back as ‘Pupcoin Bubble’ Deflates
InvestorPlace - Stock Market News, Stock Advice & Trading Tips There's no rush to cash out if you already own Shiba Inu, but start thinking about making your exit. If...
I wouldn’t say exactly that the “party’s over” for Shiba Inu (CCC:SHIB-USD). But now down nearly 40% from its all-time high, and dropping out the top 10 most-valuable cryptos, the “pupcoin bubble” that sent it on a hot run in recent months appears to have peaked.
Investors who have yet to enter a position may want to hold off buying. When the mania behind this token was in full swing, there was some logic to riding the momentum.
As for investors already holding it? This may not necessarily mean you need to sell, pronto, before it’s too late. Further declines may be in store. But similar to the situation with the dog-themed crypto that started it all, Dogecoin (CCC:DOGE-USD), it may not be destined to fall completely back to its pre-bubble prices.
Today, as the crowd is looking elsewhere for quick profit plays? For most investors bullish on crypto, your best bet is to stick with names that stand to move higher on their fundamentals. Not on their meme appeal, or on factors such as a trading debut on a major crypto platform.
Shiba Inu Could Retain Most of its ‘Pupcoin Bubble’ Gains
The pupcoin bubble is starting to deflate. Not only is SHIB-USD dropping in price. So is Floki Inu (CCC:FLOKI-USD), a smaller name that’s been riding Shiba’s coattails, and has its own plan in the works to become the most valuable dog-themed crypto out there.
However, I wouldn’t conflate the phrase “starting to deflate” with “starting to collapse in price.” That is, Shiba Inu may move lower from here, yet I don’t see it experiencing a tremendous decline. Instead, it’ll likely hold onto the bulk of its recent gains.
Why? There are several catalysts still in play. These are likely not strong enough to push it back to, or above, its past high. But they may be sufficient to either mitigate, or at least slow down, additional losses.
What catalysts am I talking about? For starters, the possibility is still there for SHIB-USD to begin trading on popular crypto platforms operated by Coinbase Global (NASDAQ:COIN), Kraken and Robinhood Markets (NASDAQ:HOOD). While it may not be happening anytime soon, in time it could happen, like it did for Dogecoin.
Along with wider access, increased utility remains a catalyst as well. In fact, despite its reputation as a knockoff of Dogecoin, Shiba is actually somewhat advanced in this area, given last summer’s launch of the ShibaSwap DeFi platform. If this token’s developers continue to put in the work, further utility advancements, and increased usage, could help bolster its price.
Cashing Out/Avoiding Remains the Best Move
With several factors still on the table, there may not be an urgent need to bail out of Shiba Inu. However, I wouldn’t take this as a sign you should initiate a position. Or, for that matter, maintain a position, ahead of it making a full recovery.
When I compared it above to Dogecoin above, I was doing so in more ways than one. Like DOGE-USD, SHIB-USD may also have slim chances of getting back to its high-water mark.
The main reason? You know how with DOGE-USD, after its run-up to a market capitalization in the tens of billions, it no longer has so much “get rich” potential? The same can be said here with Shiba Inu. Now with a market capitalization in the tens of billions ($28.4 billion to be exact), this token’s chances of doubling, much less rally ten-fold, have diminished.
Smaller “pupcoins,” like Floki Inu, still stand to make such epic runs higher. In terms of rising in popularity (and price) on speculative frenzy alone, a smaller yet well-known name like that may be the better play, if you’re on the prowl for pure gambles.
No Longer a Moonshot Play
With its days seemingly finished as a risky, high-potential return play, it’s going to be difficult for Shiba Inu to bounce back to its past highs. Instead of holding it, or buying an initial position in it, you may fare better buy something like Cardano (CCC:ADA-USD) or Solana (CCC:SOL-USD).
As they grow in usage, and level up their respective functionality? Either one of these promising altcoins could someday rise to the valuation of Bitcoin (CCC:BTC-USD) or Ethereum (CCC:ETH-USD). For now, that’s simply not a potential outcome for this “pupcoin.”
On the date of publication, Thomas Niel held long positions in Bitcoin and Ethereum. He did not have (either directly or indirectly) any positions in any other securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Thomas Niel, contributor for InvestorPlace.com, has been writing single-stock analysis for web-based publications since 2016.
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