Shiba Inu (SHIB) Price's Bearish Pattern Stays Strong as Whales Exit, Targeting a 74% Drop to $0.0000046

Shiba Inu (SHIB) prices have shown bearish signals emerging from multiple fronts. While the meme coin still garners attention, there is no denying that the market sentiment is tilting toward the downside.

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Shiba Inu (SHIB) prices have shown multiple bearish signals emerging from several fronts. While the meme coin still garners attention, there is no denying that the market sentiment is tilting toward the downside.

Here’s a closer look at the key bearish indicators that could spell trouble for SHIB.

1. Whale Offloading:

Whales have been offloading large portions of their SHIB holdings, which typically bodes ill for the price in the short term. Data from IntoTheBlock reveals a sharp decline in the number of whale wallets holding between 10 million and 1 billion SHIB tokens.

At the beginning of August, there were around 160 whale wallets in this category. However, this number has dropped significantly, with only about 80 wallets remaining as of mid-September.

This drop in whale participation often signals a weakening confidence in the asset’s near-term prospects. When big players reduce their holdings, it typically indicates an expectation of further price declines or a lack of incentives to hold for future gains.

2. Negative Funding Rate:

Shiba Inu coin’s negative funding rate has compounded the bearish sentiment. The funding rate, which reflects the cost of holding long positions, shows that short positions are currently in control.

Traders are paying to maintain short positions, suggesting they expect SHIB’s price to continue falling. This is due to their conviction that the meme coin’s price will decline further.

The continuous negative funding rate implies a bearish market outlook, with short traders having the upper hand in anticipation of further price declines.

3. Declining Open Interest:

Moreover, SHIB’s open interest has also seen a noticeable decline. Open interest, representing the total number of outstanding futures contracts, has dropped steadily, reducing market participation.

The decline in open interest often points to a lack of conviction among traders, as fewer new positions are being opened. With OI and the funding rate moving in a bearish direction, the whale offloading and declining market activity set the stage for further downward pressure on SHIB’s price.

4. Whale Transactions:

Whale transactions are key to understanding the bigger picture. As we recently covered, large offloads can trigger a cascading effect as smaller investors panic and follow suit, exacerbating the price decline.

In the case of SHIB, the massive trades are usually sell orders. This is because whales typically accumulate smaller investors’ coins en masse at lower prices.

When the price rises and the meme coin gains momentum, they begin to sell portions of their holdings at higher prices. These sell orders are denoted by the red arrows in the chart below.

As the price rises further and smaller investors follow suit by selling their coins, the buying demand dries up. At this point, the whales have difficulty finding buyers for their remaining coins.

To clear their holdings and maximize their profits, they begin to sell smaller amounts at lower prices. This is indicated by the green arrows in the chart.

With the whale offloads and market participation both declining, the selling pressure on SHIB is mounting. However, for the price to continue rising, retail demand must increase significantly as the whales exit to counteract the selling pressure.

But given the current lack of momentum and broader market uncertainty, such a shift seems unlikely.

5. Bearish Technical Pattern:

Shiba Inu price’s bearish technical setup remained strong this week, as the ‘descending triangle‘ formation continues to keep the bull run at bay.

After failing to move above the pattern’s descending trendline, SHIB USD pair’s bull run has been forced to recede. However, the pair’s support at the lower trendline has held strong so far.

The combined bearish cues could mean a Rektober for the memecoin.

Bearish Continuation Pattern

The descending triangle is a bearish technical pattern that signals intensifying selling pressure, resulting in progressively weaker rallies that struggle to breach resistance.

In this setup, traders estimate the potential downside by measuring the maximum height of the triangle. The Shiba Inu coin’s price recently broke out of this descending triangle, only for bulls to push it back within the pattern.

However, if the Shiba Inu Coin’s price confirms the bearish setup, the SHIB USD pair could plummet by over 74%, reaching a target near $0.0000046.

A breakout below the pattern in the current market climate could be catastrophic for SHIB prices, especially considering the indecision among market participants.

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