The price of dog-themed cryptocurrency Shiba Inu (SHIB) is facing a sell-off, marked by the emergence of a death cross — a bearish technical pattern that often signals further declines.
A death cross occurs when a short-term moving average crosses below a long-term moving average. In the case of Shiba Inu, the 50-day moving average has crossed below the 200-day moving average, signaling a death cross.
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Amid the current sell-off, Shiba Inu might be poised to mark its third consecutive day of losses. The most recent decline, exceeding 10%, represents the biggest single-day drop in this streak. This sharp downturn has been exacerbated by the fallout from the WazirX exploit, which has undermined confidence across the broader cryptocurrency market.
SHIB/USD Daily Chart, Courtesy: TradingView
The security breach led to the unauthorized withdrawal of over $230 million worth of cryptocurrencies, including a significant amount of SHIB. This has contributed to increased selling pressure on SHIB as the stolen tokens are being liquidated on the market.
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According to Lookonchain, the WazirX exploiter has begun selling SHIB, liquidating 35 billion SHIB for $618,000, and now holds 5.4 trillion SHIB worth $95.45 million.
On-chain data hints at SHIB's potential rebound
Despite the current bearish outlook, on-chain data suggests Shiba Inu could see a recovery. Shiba Inu sits on a major support level, where a substantial amount of SHIB has been accumulated by a large number of Shiba Inu addresses.
According to IntoTheBlock data, next to where SHIB trades is a major support range, where 156 trillion SHIB were bought by 370,520 addresses in the range of $0.000008-$0.000014, at an average price of $0.00001. Buying activity is expected to pick up near this range as the 370,520 addresses that had previously bought here are likely to provide support.
At SHIB's current trading range, a significant quantity of SHIB, 107.24 trillion SHIB, was bought in the range of $0.000014-$0.000018, raising the possibility that bulls might want to defend this zone aggressively and halt declines below $0.000014.
At the time of writing, SHIB was down 11.60% in the last 24 hours to $0.000017. According to on-chain data, Shiba Inu faces its next major resistance in the range of $0.000018-$0.00002, where 34,690 addresses currently hold 423.96 trillion SHIB.
