Despite a slight recovery driven by Bitcoin's resurgence, Shiba Inu (SHIB) faces strong resistance at key exponential moving averages (EMAs). To rally again, SHIB needs to re-enter the falling wedge pattern.
SHIB Price Faces Rejection
Recently, SHIB almost reached its yearly lows during a market crash. Although Bitcoin's recovery saw a market-wide upswing, SHIB and other cryptocurrencies may experience an extended downturn in the coming days. Shiba Inu broke down from a falling wedge on August 3, a rare occurrence that signals extreme bearish pressure. Despite a minor recovery, SHIB's price action suggests a potential 16% drop from its current price.
The current trend for Shiba Inu is downward, with the price consistently declining within a falling channel pattern, indicating strong bearish momentum. SHIB found support around $0.000012, with a stronger support level at $0.00001. Immediate resistance exists at the 50-day EMA ($0.00001425) and the 200-day EMA ($0.00001628).
If SHIB fails to re-enter the falling wedge, it may drop 18% to the previous six-month low of $0.00001082. The Relative Strength Index (RSI) is at 47.61, approaching neutral, suggesting the asset is neither overbought nor oversold. The Chaikin Money Flow (CMF) is at 0.03, indicating slightly positive money flow, which could signal early buying interest.
A steady decline in volume during the recent minor upward move indicates bearish volume-price divergence, supporting the continuation of the bearish trend unless there is a significant breakout. If SHIB surpasses $0.00001344, it may re-enter the falling wedge, turning bullish once more. A break above the 50 EMA could lead to a bullish breakout toward $0.00001625 and $0.000018.
On-Chain Risk Analysis for $7.24 Billion Tokens
Data from Coinalyze shows SHIB's open interest dropped 4.54% over the last 24 hours, indicating money flowing out of the Shiba Inu market. This suggests the recent minor uptrend may be ending, with the bear trend likely to continue.
Consequently, over 26,000 Shiba Inu holders are at risk as their 14.29 trillion ($190 million) tokens may soon enter unrealized losses. These tokens will join over 542 trillion ($7.24 billion) tokens that have been underwater for nearly three weeks, according to IntoTheBlock data. If buying pressure and volume increase, it may overturn the current bearish outlook and propel SHIB's price higher.
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