Shiba Inu (SHIB), the second-largest memecoin by market capitalization, faced a significant dip after being implicated in the recent hacking incident at the India-based crypto exchange, WazirX. This unsettling news has amplified concerns of a potential selloff, casting a shadow over SHIB's short-term outlook.
Over $100M worth of SHIB tokens compromised
On July 18, SHIB’s price fell roughly 10%, reaching $0.00001720. This decline occurred after Web3 security firm Cyvers identified the suspicious movement of cryptocurrencies valued at around $235 million from wallets linked to WazirX, including about $100 million worth of Shiba Inu.
The wallet also held $52 million in Ether (ETH), $11 million in Polygon (MATIC), $4.7 million in Floki (FLOKI), $3.2 million in Fantom (FTM), $2.8 million in Chainlink (LINK), and $2.3 million in Fetch.ai (FET). All these cryptocurrencies have declined in price following WazirX's security breach.
The hacker has already swapped shifted funds comprised of Tether (USDT), Pepe (PEPE), and Gala (GALA) into Ether using Tornado Cash, a crypto-tumbling service. It may dump the remainder of the stolen cryptocurrencies for Ether, including Shiba Inu.
SHIB price technicals hint at more downside
SHIB's price decline following the WazirX hacking incident extends its ongoing correction trend.
Notably, the memecoin has dipped by over 15% after testing a resistance confluence comprising the upper trendline of its descending channel, the 50-day (red) and the 200-day (blue) exponential moving averages (EMA), and a support-turned-resistance range.
Furthermore, SHIB’s correction started after its daily relative strength index (RSI) reading climbed to around 62, a move that has lately preceded correction periods toward the descending channel’s lower trendline.
That said, SHIB’s potential to continue its decline within the channel is higher if the fractal repeats. In this bearish scenario, the memecoin may fall toward $0.00001263 by the end of July — down by over 25% from the current price levels.
Conversely, a retreat from the ongoing correction may have SHIB retest its resistance confluence zone at around $0.00002000.