Shiba Inu (SHIB) Faces Bearish Outlook as Market Sentiment and Metrics Signal a Potential 74% Drop

Since August 5, Shiba Inu (SHIB) has been experiencing a phase of consolidation, marked by limited price movement and subdued volatility. After rebounding from a six-month low, SHIB has struggled to break past its immediate resistance levels.

After rebounding from a six-month low, Shiba Inu (CRYPTO: SHIB) has been struggling to break past its immediate resistance levels.

The token has been in a phase of consolidation since August 5, with limited price movement and subdued volatility.

The price has hovered around a narrow range, reflecting cautious market sentiment.

According to market data, SHIB’s open interest-weighted funding rate has been showing a sustained negative value, indicating that short positions are becoming increasingly dominant.

This trend suggests that traders are more inclined to bet against SHIB, reflecting a lack of confidence in its near-term price potential.

Moreover, the open interest for the SHIB futures contracts has suffered a significant decline since Feb. 2024, marking a clear reduction in speculative interest.

The declining open interest is usually a precursor to lower price volatility but also suggests a diminishing belief in any immediate bullish reversal for SHIB.

Finally, the distribution chart shows a smaller shift, with smaller holders have been accumulating SHIB, while larger holders are reducing their positions.

The shift in distribution, with whales or large holders decreasing their stake, signals that informed investors anticipate a further decline in the SHIB/USD pair.

The accumulation by smaller holders, likely driven by speculative motives rather than strong conviction, does not offset the bearish sentiment created by the exit of larger holders.

Despite SHIB’s intermittent rallies driven by short-term bullish sentiment and community initiatives, the overall technical and on-chain data point to a bearish outlook.

The SHIB price fails to move above immediate resistance

The SHIB/USD pair jumped nearly 12% on Aug. 8, possibly celebrating the judgment in the SEC Ripple lawsuit.

However, bears were back in business on Aug. 9, forcing the token to drop after failing to rally above immediate support near $0.0000139.

The strong selling pressure near the immediate resistance suggests that buying momentum is weakening. Bulls are struggling to sustain the rally, and if this trend continues, SHIB could drop to the immediate support at $0.0000122.

A break below this level could intensify selling pressure, potentially pushing the price down to $0.0000111.

Conversely, if SHIB manages to recover, it would face initial resistance at $0.0000143, with further upside potential targeting the 0.786 Fibonacci retracement level near $0.000016.

The relative strength index (RSI) remains neutral at 38.06, indicating that SHIB is neither oversold nor overbought, leaving room for volatility in either direction.

The above is the detailed content of Shiba Inu (SHIB) Faces Bearish Outlook as Market Sentiment and Metrics Signal a Potential 74% Drop. For more information, please follow other related articles on the PHP Chinese website!