Market Performance and Derivatives Activity
Shiba Inu experienced a significant decline on Monday, losing over 6% in a single day. This downturn extended a four-session streak of weakness that began late Friday. The slide occurred shortly after the token attempted to rally towards the $0.00000913 region but encountered substantial resistance. Sellers quickly gained control, leading to liquidations across derivatives markets.
In the past 24 hours, more than $263,000 in long positions were liquidated, contrasting with only $9,640 in short liquidations. This data indicates that selling pressure is currently stronger than buying interest, reinforcing the downtrend as long position holders move to open short positions to mitigate further losses.
Despite the price drop, trading activity showed an increase. According to CoinMarketCap, SHIB’s 24-hour trading volume rose by more than 51%, reaching approximately $125 million. While such a spike typically suggests renewed interest, in this instance, the majority of this activity was driven by distribution rather than accumulation, contributing to the ongoing downward pressure.
This market behavior aligns with the broader cautious sentiment in the cryptocurrency market. With momentum waning and traders exhibiting apprehension, the focus now shifts to whether this decline represents a temporary pullback or the beginning of a more significant deterioration.
Technical Analysis: SHIB Trades Below Major Moving Averages
From a technical perspective, the trend remains decidedly downward. SHIB is currently trading below its 20-day, 50-day, 100-day, and 200-day moving averages, all of which are positioned above the price and are trending lower. This configuration confirms sustained weakness and suggests that buyers have not been able to mount a meaningful challenge on either short-term or long-term timeframes.
Furthermore, the price is trading within a descending broadening wedge pattern. This pattern typically signals a reversal only after a clear breakout occurs. For now, the token remains confined between the diverging trendlines, with widening volatility.
Should selling pressure persist, a decline towards the lower boundary of the wedge is probable, a level where the price has historically shown a reaction. Momentum indicators echo this bearish outlook. The Relative Strength Index (RSI) is hovering near 37, still some distance from the oversold threshold of 30. This indicates that sellers continue to dictate market movement, and buyers have not yet demonstrated sufficient strength to shift market sentiment.
On-Chain Activity Reflects Fading Confidence
Analysis of on-chain and derivatives data suggests that confidence in SHIB is continuing to decline. The 11% decrease in open interest over the last day signifies a reduction in active positions as traders close out their exposures.
A declining open interest concurrent with a falling price typically implies that the market is dominated by participants exiting their positions rather than those hedging or adding to them. This sentiment strongly suggests a lack of faith in SHIB’s near-term price recovery.
This pattern is observable across the broader derivatives market, where long liquidations have consistently surpassed short liquidations. The disparity between these figures highlights significant selling pressure and reinforces the view that traders are adopting a defensive stance, anticipating further downside volatility.
Key Levels to Watch for SHIB's Next Move
The token is now approaching its immediate support zone, located between $0.0000078 and $0.0000075. This area has previously prevented a more substantial sell-off. If buyers enter the market with conviction, this region could serve as a foundation for a short-term bounce.
However, if this support band fails to hold, the next likely destination would be near the lower trendline of the descending wedge. Below this level, the area around $0.00000605, which aligns with the 127.20% Fibonacci extension, emerges as a realistic downside target.
For sentiment to shift positively, SHIB must first reclaim the 20-day moving average, currently situated around $0.0000085. Regaining this level would represent the earliest indication that buyers are prepared to re-enter the market. A sustained move above this average could propel the token back towards the resistance zone between $0.00000881 and $0.00000913, which was the origin of the current decline.