One of the most popular meme coins is suffering at the hands of the current market. U.Today reported that Shiba Inu’s profitability has fallen to a dire 13%. Moreover, the report notes that danger is looming if it falls below 10%.
There is no understating of the prevalence of Shiba Inu, and its community, in the crypto industry, yet, a variety of factors have negatively impacted its new inflows. Although the circumstances aren’t detrimental yet, there is evidence to believe a continued decrease could be tragic.
SHIB Profitability Could Impact Market Value
In normal circumstances, any asset’s profitability will not substantially affect its market value. With context dictating the outcome of differing circumstances, most investors will be more active when profitability rises towards 90%. Contrastingly, they will invest more as holders see losses.
Conversely, there are thresholds that could indicate the value of a digital asset would incur a stronger hit. U.Today has indicated that recent data collected about Shiba Inu’s profitability of 13% could be closing in on a negative impact of the value.
The report writes, “as a large layer of investors will enter a panic mode, especially ahead of major events like Christmas.” Adding, “Shiba Inu might not become an exclusion,” Within the report. Furthermore pointing to the continued trend downward for the past 18 days provides insight into the short-term sentiment of investors.
Additionally, a continued drop could be the subsequent action that ensues a “chain of large sales that would push potential investors even further.” Nevertheless, the current prognosis is not set in stone. There are, alternatively, instances where low profitability can be positive.
For some investors, low profitability acts “as a bullish factor that shows investors how profitable their potential positions might be in the future.” Conclusively stating that the metric, at times, “acts as an oversold/overbought indicator.” The complicated state of many meme coins, however, makes their volatile nature a difficult sell in current circumstances.