Shiba Inu Faces Bearish Reversal Amid Market Volatility

Shiba Inu Faces Bearish Reversal Amid Market Volatility

On Sunday, the price of Shiba Inu (SHIB) experienced a decline of 4%, falling to $0.00001342. This drop coincided with Bitcoin’s fall below the crucial $60,000 support level, intensifying selling pressure across major altcoins and affecting the meme cryptocurrency sector due to its inherent volatility and speculative nature. The sell-off led SHIB to retreat from its multi-month resistance, signaling a potential risk of a more significant correction.

Shiba Inu Price Forecast: Bearish Trends Persist

Throughout the week, Shiba Inu’s price demonstrated a sideways trend, struggling to break through the $0.000014 barrier. Despite recent market recoveries, this period of consolidation lacks the buyer conviction needed to drive the asset upward.

Today, SHIB’s price made another unsuccessful attempt to surpass the overhead trendline, forming a long-rejection candle that highlights significant overhead supply. Notably, despite burning 40 million SHIB in the past 24 hours—a move that saw a 3500% spike in the burn rate—the selling momentum persists. Typically, such a large burn would reduce the circulating supply and potentially support price stability or even initiate a rally. However, the ongoing correction trend suggests that broader market factors are overshadowing the burn’s impact, keeping the price under pressure.

In August, Shiba Inu has experienced a significant drop in Open Interest. According to Coinglass, SHIB’s Open Interest fell from $37 million to $23.2 million, marking a decrease of approximately 37%. This substantial reduction in OI indicates a decline in market participation or liquidity, which could signal waning investor confidence.

As a result, the current correction may push Shiba Inu’s price down by 30%, potentially retesting the support level at $0.0000095 within the falling wedge pattern.

Despite the bearish trend, the two converging trendlines of the falling wedge pattern suggest a diminishing bearish momentum. This implies that SHIB’s price might be poised for an upward breakout, possibly signaling the beginning of a trend reversal.

The Relative Strength Index (RSI), which has bounced from oversold conditions to 35%, highlights demand pressure at these lower levels. Should a breakout occur, a post-breakout rally could drive the asset up by 50%, potentially reaching $0.00002.