SHIB Faces 9% Drop Amid Bearish Technical Signals
Key Takeaways
- Shiba Inu (SHIB) saw an 8% increase in Open Interest – a sign of heightened speculation.
- However, technical indicators point to a potential price correction.
- A bearish chart pattern and liquidity data suggest a possible decline of up to 9%.
Open Interest Rises – What Does It Mean?
Open Interest (OI) refers to the number of open derivative contracts such as futures or options that have not yet been closed or settled. An 8% increase in OI for Shiba Inu indicates that more traders are opening positions – a sign of growing market interest.
However, higher OI alone does not indicate a clear direction. It can accompany both bullish and bearish movements. That’s why it’s worth looking at supporting market data.
Technical Analysis: Warning Signs Are Increasing
Shiba Inu briefly broke out of a downward trend channel in mid-May, which was initially seen as a bullish signal. However, the price failed to hold above the resistance level at USD 0.000017 – a level that previously marked a high in February.
Since then, the price has been trending downward again and is approaching the support zone at USD 0.000014. While the 20- and 50-day moving averages still indicate a positive trend, that trend is weakening.
Notably, the chart is forming a descending triangle – a classic pattern that can signal a potential downward trend reversal. If the price closes below USD 0.0000142, it would be a clear bearish signal.
Capital Flows and Volume Are Stagnating
Two additional indicators confirm the market’s uncertainty:
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- The Chaikin Money Flow (CMF) is at zero – a sign that neither buyers nor sellers are in control.
- The On-Balance Volume (OBV), which measures trading volume, has been moving sideways for weeks. Interest appears to be stagnating.
These data suggest that current demand for SHIB is insufficient to sustain the price.
Liquidity Data Highlight Critical Zones
A look at the liquidation heatmap – a tool for analyzing price zones with high liquidity – reveals a concentration of stop-loss orders just below USD 0.000014. This zone has built up over the past ten days and is close to the current price.
A break below this level could trigger a chain reaction: traders would be forced out of their positions, creating additional selling pressure. In this scenario, a price drop to around USD 0.0000129 is conceivable – a decline of around 9%.
Our Assessment
The recent increase in Open Interest for Shiba Inu shows that more traders are once again paying attention to the coin. But the technical data tells a different story: a descending triangle, weak capital flows, and a critical liquidity zone all point to a potential correction.
If you’re invested in SHIB or considering entering the market, you should closely monitor the support level at USD 0.000014. A break below this line could mean further short-term losses.
Sources
- TradingView
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