- Shiba Inu (SHIB) has broken below its key support level, signaling a potential 23% decline as selling pressure increases.
- Technical indicators confirm a bearish trend, although a reversal could occur if buying pressure rises.
Shiba Inu (SHIB), one of the most talked-about meme coins, has recently experienced a significant shift in its market dynamics. After a period of trading within a horizontal range since August 8, SHIB broke out above the upper boundary of this channel. However, the excitement was short-lived, as the coin failed to maintain its momentum and fell back below the resistance on August 28.
This failed breakout marked a crucial turning point for SHIB. The coin’s descent has taken it towards the lower boundary of its consolidation channel, which previously acted as support. Unfortunately, SHIB has now breached this support level, signaling a potential increase in selling pressure and a possible further decline in its value.
Technical Indicators Signal Bearish Trends
The market’s current state can be described as consolidation, where SHIB traded within a defined range between $0.000014 (resistance) and $0.000012 (support). This sideways movement indicated a balance between buying and selling pressures, preventing significant price movements in either direction.
The recent breakdown below the consolidation channel’s lower boundary suggests that SHIB’s bulls have failed to defend a key support level. This shift in market sentiment from neutral to bearish is reinforced by technical indicators. The Directional Movement Index (DMI) on the one-day chart shows that the positive directional index (+DI) is now below the negative directional index (-DI). This configuration indicates that selling pressure is dominating the market.
Moreover, SHIB’s Relative Strength Index (RSI) is currently at 40.30, below the neutral 50 mark. This downtrend suggests that market participants are more inclined towards distribution rather than accumulation, contributing to the downward pressure on SHIB’s price.
Looking Ahead: Potential for Reversal or Further Decline
Despite the bearish outlook, there is a glimmer of hope for SHIB if the coin manages to reverse its recent downtrend. A successful retest of the recent breakout level and increased buying pressure could signal the start of a new uptrend. If this scenario unfolds, SHIB might aim to rally towards the resistance level of $0.000014 and potentially target the $0.000018 mark.
However, if the current bearish trend persists, SHIB’s value could face a further 23% decline, potentially bringing the price down to its August 5 low of $0.00001. This would indicate a deeper bearish outlook, with ongoing selling pressure continuing to impact the coin’s value.
While Shiba Inu’s recent price action reflects a bearish trend, the potential for a reversal remains if buying pressure increases. Investors should keep a close eye on market developments to navigate these turbulent waters effectively.
