Shiba Inu ($SHIB ) is navigating a pivotal moment as conflicting technical signals emerge, leaving its short-term outlook uncertain. The popular meme-based cryptocurrency has suffered a 20% drop in the past week, causing its market capitalization to shrink from $15 billion to $12.5 billion. Despite the bearish trend, there are signs of potential recovery as key technical metrics signal a tug-of-war between bullish and bearish forces.
RSI Recovery Hints at Momentum Shift
One of the more encouraging signs for $SHIB is the sharp recovery in its Relative Strength Index (RSI), which has rebounded from an oversold level of 16.9 three days ago to a current reading of 44. The RSI is a widely-used momentum indicator that gauges the speed and scale of price movements. With SHIBโs RSI climbing out of oversold territory but not yet nearing overbought levels, there is room for further upside potential. This improvement suggests a shift in market sentiment, though traders will need to monitor if this momentum can sustain itself in the days ahead.
Declining Whale Activity Raises Concerns
On the other hand, whale activity in the SHIB ecosystem has seen a noticeable decline, signaling a potential shift in market dynamics. Between December 14 and December 19, the number of addresses holding at least 1 billion SHIB tokens rose from 10,861 to 10,930. However, this trend reversed sharply, with the whale count falling to 10,875 by December 22. This drop of 55 whale addresses in just three days suggests a potential distribution phase, where larger holders reduce their exposure or take profits. Such movements often precede increased selling pressure, which could weigh on SHIBโs price action in the short term.
Key Price Levels to Watch
SHIBโs price currently hovers near a crucial support level at $0.00001985. A failure to hold above this threshold could trigger a deeper correction, with the next major support at $0.0000158. Conversely, if SHIB manages to reclaim the $0.000022 resistance level, it could pave the way for a bullish breakout toward targets at $0.000024, $0.000026, and potentially $0.0000298. However, the recent formation of a bearish โdeath crossโ pattern on December 18 suggests that downside risks remain significant.
As SHIB balances on this knife-edge, traders should exercise caution and closely monitor both technical and on-chain metrics to navigate the evolving market landscape.
