SHIB hits seven-month low as Ethereum TVL drops $14B after Pectra upgrade

• On Tuesday, Shiba Inu’s price reached $0.00001, marking its lowest level since August 2024. 
• Since the launch of the Pectra upgrade testnet on March 5, Ethereum has experienced $14 billion in total value locked (TVL) outflows. 
• Technical analysis of the SHIBUSDT 12-hour chart indicates a potential for further declines. 

The price of Shiba Inu (SHIB) dropped to $0.00001 on Tuesday, hitting a seven-month low before recovering by 6%. On-chain metrics reveal that investors have been withdrawing funds from the Ethereum ecosystem after the Pectra upgrade, which may lead to continued losses. 

Shiba Inu (SHIB) Price Reaches Seven-Month Lows Amid Memecoin Traders’ Fear

Shiba Inu experienced a significant price drop on Tuesday as memecoin traders exacerbated sell-offs driven by several bearish factors.

The sell-off began with the release of the US Nonfarm Payrolls (NFP) data on Friday, setting off a bearish trend over the weekend.

A fresh wave of tariff disputes between the US and Canada on Monday further fueled the decline, causing cascading liquidations that sent SHIB prices plummeting as investors sought to withdraw from high-risk and low-liquidity meme tokens.

Shiba Inu Price Action, March 11

Over the past four days, SHIB plummeted by 28.88%, dropping to as low as $0.000010 on Tuesday before buyers managed to push the price back up to approximately $0.000012 at the time of writing. However, the low trading volumes accompanying this recovery indicate a lack of strong conviction. 

Ethereum TVL Withdrawals Indicate Decreased Ecosystem Activity Post-Pectra Upgrade

Alongside the bearish macro influences resulting from US trade policy changes, SHIB’s underperformance in the past week has been correlated with a wave of investor withdrawals from the Ethereum ecosystem. DeFiLlama’s Total Value Locked (TVL) measures the total invested capital within a blockchain network and serves as a vital indicator of market sentiment.

Since the launch of the Pectra upgrade testnet on March 5, Ethereum has seen a $14 billion decline in its TVL, falling from $101 billion to $87 billion by Tuesday.

This decline coincided with a corresponding 17% decrease in Shiba Inu’s price during the same timeframe.

Ethereum Total Value Locked (TVL) | DeFiLlama 

The downturn suggests that the eagerly anticipated Pectra upgrade has yet to attract new liquidity into the Ethereum ecosystem.

Despite expectations that the upgrade would enhance efficiency and scalability, current investor sentiment appears bearish, as concerns over implementation delays and broader market pressures emerge.

Moreover, growing uncertainties surrounding Donald Trump’s potential to gain congressional support for his proposal regarding a crypto strategic reserve have likely dampened investor confidence as well.

What was once a source of speculative enthusiasm for Ethereum-related assets such as SHIB now poses additional downside risks due to legislative hurdles.

If Ethereum continues to see TVL outflows, further declines in SHIB’s price could be on the horizon. A prolonged reduction in liquidity across the ecosystem typically results in diminished on-chain activity, lower trading volumes, and weakened price support for Ethereum-based assets like Shiba Inu.

Shiba Inu Price Outlook: Bears May Target $0.00001 Break Point

Despite a slight recovery during the day on Tuesday, Shiba Inu’s price remains under downward pressure. The 12-hour chart shows SHIB trading at $0.00001188 after touching a seven-month low of $0.00001000. With Bollinger Bands expanding, and price movements lingering near the lower band, this indicates heightened volatility and ongoing selling pressure.

The Volume-Weighted Average Price (VWAP) sitting at $0.00001156 shows that bulls are having difficulty regaining lost ground, underlining the persistence of bearish momentum.

Shiba Inu Price Forecast

The BM-X indicator illustrates a diminishing bullish strength, as green peaks lose momentum while red zones start to dominate, signaling a fragile market sentiment.

A breakdown below $0.00001124, which represents the lower Bollinger Band support, could lead to another test of the crucial $0.00001000 level. 

If bearish pressure increases, liquidations from overleveraged positions could push the price even lower, with $0.00000950 emerging as the next significant support level.

Conversely, SHIB would need to close decisively above the upper Bollinger Band resistance at $0.00001297 to regain a bullish stance. 

A successful breakout above this resistance could pave the way for a short-term recovery towards $0.00001470. Until then, the potential for further downside remains, with traders closely monitoring liquidity levels and leverage adjustments across the broader market.