Shiba Inu (SHIB) continues to show high volatility amid mixed technical signals. With a 19.01% gain in seven days, it maintains its position as the second-largest memecoin by market cap, behind only Dogecoin (DOGE).
Technicals paint a complex picture, with the RSI cooling off from overbought levels and decreasing accumulation by whales suggesting possible short-term corrections.
However, strong indicators still leave room for potential upside, making the next price move particularly crucial for traders.
RSI is NEIGHBORHOOD
The drop in SHIB’s Relative Strength Index (RSI) from 85 to 51.8 indicates a significant cooling in buying momentum. When the indicator was at 85, it showed that the price was heavily overbought, with buyers dominating the market.
The current RSI, in turn, suggests a more balanced scenario, where buying and selling pressures have equalized after a period of profit-taking by traders.
SHIB RSI. Font: TradingView
The historical RSI of nearly 90 during the high at $0.000033 represented an extremely overbought condition that was unsustainable. The current drop to 51.8 suggests a healthy consolidation phase rather than a trend reversal, as readings between 40-60 typically indicate stable market conditions.
While this cooling off could lead to a short-term price correction, it does not necessarily signal the end of the uptrend.
Whales are not hoarding
The decreasing number of whales buying SHIB indicates that large holders are taking profits or reducing exposure during the recent price increases.
Whales, which can significantly impact the market due to their large holdings, often set market trends that smaller investors follow. Their gradual exit suggests caution regarding current valuation levels.
Holders with at least 1 billion SHIB. Source: Santiment
The drop from 11,013 to 10,858 wallets holding over 1 billion SHIB represents a loss of 155 large holders in just one month. This distribution of tokens from large to smaller holders typically creates selling pressure and could signal a weakening of bullish sentiment.
However, this redistribution also means that the asset is becoming more decentralized, which could be healthy for long-term price stability despite short-term selling pressure.
Price Prediction: Is a 17% Correction Imminent?
Shiba Inu price’s dip below the shorter EMA line signals a loss of momentum in its recent uptrend. While the longer-term EMAs remain bullish, price action below the faster moving average suggests that short-term bearish pressure is building.
SHIB Price Analysis. Source: TradingView
Furthermore, the price is now at a critical point with significant swings possible in either direction. A bearish scenario could see SHIB test the $0.000026 and $0.000023 support levels, representing a 17.8% drop.
On the other hand, if bulls regain control, the cryptocurrency could retest its recent high of $0.000033 and potentially rally to $0.000040, offering a 42% upside potential from current levels.
The post Shiba Inu (SHIB) Shows Signs of Exhaustion, Could Fall Further – Analysis appeared first on BeInCrypto.
