Following a significant surge that drove Shiba Inu (SHIB) to its peak for the year at $0.00004567, the beloved memecoin has subsequently retraced most of its gains. In actuality, it has shed more than 71.69% of its valuation.
During this time frame, SHIB’s price movement started to shape a symmetrical structure, typically an indicator of an imminent rally. Nevertheless, this time around, the pattern is expected to falter, as CryptoCrypto has unveiled more fundamental concerns with SHIB.
Potential Yearly Low on the Horizon for SHIB as Symmetrical Formation Faces Challenges
As of now, SHIB is trading within a symmetrical pattern, characterized by an upper resistance line that exerts selling pressure and a lower support line that provokes buying interest. Traditionally, a breakout is foreseen as the price nears the converging point of these lines.
Despite the anticipation of an upsurge post a rebound from the local support at $0.00001266, the buying momentum appears insufficient to breach the upper resistance level.
In the event that the resistance persists unbroken, a reversal in price could be anticipated, with possible targets at $0.00001078, $0.00000822, and $0.00000655. Particularly, a decline to $0.00000822 would nullify all the profits accumulated by SHIB holders during the rallies in February and March.
Moreover, data from Coinglass also indicated that the Open Interest data signaled a potential reversal, declining from $26.41 million on 10 September to $24.99 million at the time of reporting.
Anticipated Major Decline Supported by Metrics
Further, exchange netflows data from Coinglass revealed that SHIB witnessed certain positive flows, hinting at investors transferring their holdings to exchanges, potentially for selling purposes. This could trigger a period of price devaluation if selling pressure persists.
Positive exchange netflows typically signify a greater influx of cryptocurrencies into exchanges than out – an indication of intentions to sell.
Analysis from CryptoCrypto also discovered that positive exchange flows corresponded with a surge in active addresses, as disclosed by CryptoQuant. Essentially, these traders are presently actively offloading their SHIB assets.
The likelihood of SHIB’s price declining further is significant, particularly if exchange netflows and active selling activities persist at their current levels.
Mounting Bearish Sentiment Emerges for SHIB
Lastly, metrics such as the Aroon line and the Money Flow Index (MFI) suggested an imminent downturn that could further bear down on SHIB’s price.
The Aroon Down line (blue) with a reading of 57.14% stood above the Aroon Up line (orange) at 0.00% – indicative of bearish momentum.
In simpler terms, this pointed to the fact that recent lows have outnumbered highs. This underscored the dominance of sellers in the market and the likelihood of the price continuing its descent.
Additionally, the Money Flow Index hovered close to the neutrality level at 39.33, but it has started to trend downwards – indicating moderate selling pressure. It also hinted at a growing bearish sentiment, albeit without any significant market fluctuations.
A further dip in the MFI would probably result in a substantial decline in SHIB’s valuation.