- Shiba Inu (SHIB) is facing a potential revisit to its recent local lows due to bearish short-term momentum and a weakening burn rate.
- Technical indicators suggest a cautious approach, with significant market indecision expected in the near term.
Shiba Inu [SHIB] has recently been navigating a choppy market with mixed signals from its technical indicators. The cryptocurrency has shown a bullish market structure over the short term, but the long-term trend remains bearish. This article delves into the current state of SHIB’s price movements and evaluates the likelihood of it hitting new local lows.
Technical Indicators: A Mixed Bag
The recent technical indicators for Shiba Inu did not present a clear trend in progress. The short-term sentiment has turned bearish, partly due to Bitcoin’s recent drop, which has impacted broader market dynamics. Despite a bullish market structure in the near term, SHIB’s longer-term trajectory has been predominantly negative, suggesting a potential revisit to previous local lows before any significant upward movement.
Burn Rate and Market Sentiment
Shiba Inu’s burn rate, a crucial factor for its long-term value proposition, has slowed recently due to decreased activity. While this doesn’t immediately affect short-term price behavior, sustained reduced activity over several weeks could erode investor confidence. If the burn rate continues to decline, it might signal broader market concerns, potentially leading to a bearish trend.
Critical Price Levels and Market Structure
On August 23rd, SHIB experienced a break in its bullish market structure when it fell below the recent lower high of $0.0000144. Currently, if the daily session closes below $0.00001336, the market structure could shift to a bearish stance. The Chaikin Money Flow (CMF) stands at -0.01, indicating a lack of significant capital flows into or out of the market recently. This neutrality suggests traders should remain cautious.
Bearish Signals and Short-Term Outlook
The daily Relative Strength Index (RSI) is positioned below the neutral 50 mark, signaling bearish momentum, though it’s not particularly strong. The likelihood of revisiting the $0.00001336 low appears high before any potential price bounce. Additionally, if SHIB’s price moves towards the 61.8% or 78.6% retracement levels overhead, a swift rejection might occur, providing short-selling opportunities for traders.
Open Interest and Liquidation Levels
Over the past week, SHIB has seen a decline in price, mirrored by a drop in Open Interest (OI). This trend reflects bearish sentiment, with speculators choosing to stay on the sidelines. The absence of significant short-selling or substantial liquidation levels indicates a balanced futures market, suggesting a choppy and indeterminate trend in the near term.
Biding Time for a Trading Opportunity
Given the current market dynamics, Shiba Inu prices are likely to hover around recent lows with a potential for short-term fluctuations. Traders should prepare for a possibly extended period of market indecision until significant liquidity builds up. Until then, short-term trading opportunities remain elusive, and patience will be key for those looking to capitalize on future price movements.
