Shiba Inu’s profitability nowhere near ‘average’ values as token might face some problems if price dives further
The profitability of the most popular meme coin on the market is steadily falling as risk appetite in the industry is not recovering, and meme assets are not seeing any new inflows. But the real problem can arise when SHIB’s profitability falls below the 10% threshold.
Usually, the profitability of an asset itself does not have any direct effect on market value. Depending on the state of an asset, investors may take profits more actively when the asset’s profitability reaches values close to 90% and, in contrast, buy more when the majority of holders are at a loss.
However, there are certain thresholds beyond which the value of tokens or coins can take a strong hit as a large layer of investors will enter into panic selling mode especially before major events like Christmas.
Shiba Inu might not become an exclusion as it has been moving in the downtrend for the last 18 days, showing that short-term sentiment among investors is not great, and a further drop in profitability might launch a chain of large sales that would push potential investors even further.
However, low profitability can sometimes be a positive factor that acts as a bullish factor that shows investors how potentially profitable their position could be in the future. Simply put: the metric acts as an oversold/overbought indicator in some cases.
In general, Shiba Inu, Dogecoin, BabyDoge and other meme assets are in a complicated state nowadays. No retail or institutional investor is ready for exposure to extreme volatility, yet shallow assets that do not bring any real value to the world or have any use case other than payments.
