Shiba Inu Coin Faces Growing Bearish Pressure Despite Temporary Bullish Defense
NOIDA (CoinChapter.com)— The Shiba Inu coin recently defended against falling below a key bearish technical pattern, offering short-term hope for bulls. However, despite this resilience, several bearish indicators still cloud the token’s outlook.
SHIB’s latest price movements show a struggle to break through key resistance levels, with selling pressure holding the token down. The outlook remains bearish for the Shiba Inu coin as selling pressure continues to suppress recovery attempts.
The persistent downward momentum is echoed across multiple technical indicators, with the futures market reinforcing a negative bias.
Shiba Inu Coin Bulls Fighting Bearish Setup
Meanwhile, SHIB USD pair narrowly avoided confirming a bearish technical setup called the ‘descending triangle‘ as bulls fought against the selling pressure.
SHIB USD pair formed a bearish setup with a 65% downside target. Source: Tradingview
Analysts recognize the descending triangle as a bearish continuation pattern. The configuration features a declining upper trendline that compresses price action into lower highs, while a flat lower trendline serves as consistent but weakening support.
The pattern signals intensifying selling pressure, resulting in progressively weaker rallies that struggle to breach resistance.
In this setup, traders estimate the potential downside by measuring the maximum height of the triangle. Pepe coin’s price recently broke out of this descending triangle, only for bulls to push it back within the pattern.
However, if the Shiba Inu Coin’s price confirms the bearish setup, the SHIB USD pair could plummet by nearly 65%, reaching a target near $0.00000457.
A breakout below the pattern in the current market climate could be catastrophic for SHIB prices, especially considering the indecision among market participants.
Futures Market Reflects Bearish Sentiment
The SHIB futures market continues to highlight growing bearish sentiment. Open interest (OI) in Shiba Inu coin futures dropped sharply from approximately $104 million in early June to under $20 million in early Sept. 2024.
The decline signals reduced speculative interest and suggests traders lose confidence in significant price moves. Lower OI, typically a sign of fading momentum, indicates a market unwilling to engage in riskier bets on SHIB’s price direction.
Shiba Inu coin futures open interest. Source: Coinglass
Furthermore, the decline in open interest coincides with SHIB’s struggle to maintain bullish momentum, reinforcing the sentiment that traders are repositioning for potential downside risks. The reduction in speculative activity reflects a cautious market, where traders are less willing to take risks.
Additionally, the OI-weighted funding rate has remained predominantly negative throughout Aug. and early Sept. 2024, with only brief positive spikes.
Negative funding rates, where short sellers pay long positions, reflect a broader market expectation of further downside for Shiba Inu coins.
Shiba Inu coin supply distribution by balance of addresses. Source: Santiment
Moreover, Santiment data further reinforces the bearish sentiment. Wallets holding between 10 million and 100 million SHIB and those holding 100 million to 1 billion SHIB have shown consistent declines in holdings since July, indicating that larger holders are offloading their positions.
Interestingly, even smaller wallets holding between 100,000 and 1 million SHIB showed a recent decline starting Sept. 7, which could suggest growing selling pressure among retail investors. This distribution of holdings across wallet sizes points to broad-based selling pressure, adding to the bearish narrative.
The declining open interest, negative funding rates, and Santiment’s wallet distribution data signal a market skewed toward bearish positions. As large and small holders offload SHIB, persistent selling pressure across futures and spot markets points to a continued bearish outlook.
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