Market Rejection and Technical Indicators Signal Further Decline
Shiba Inu (SHIB) recently experienced a brief rally that many traders are now considering a “dead cat bounce,” a short-term price increase within a larger downtrend. Despite the initial surge, the cryptocurrency has failed to maintain its momentum, and key technical indicators suggest that SHIB’s price may soon face further declines.
Experts point out that there has been no significant volume increase to support the brief rally, and no structural changes on the chart to signal a trend reversal. Instead, SHIB’s price movement has been characterized by resistance at key levels and rejection at attempts to break higher. The market quickly corrected, with selling pressure emerging right after the price rise.
Resistance and Weak Sentiment Limit SHIB’s Recovery
The technical outlook for SHIB remains grim as it continues to face resistance from its major moving averages. The 50-day, 100-day, and 200-day moving averages are all sloping downward, signaling that SHIB remains in a prolonged downtrend. Despite several attempts, the cryptocurrency has struggled to break above even the 20-day Exponential Moving Average (EMA), and every attempt to push higher has been met with rejection from sellers.
Moreover, the market’s overall sentiment remains weak. Volume continues to be low, and the Relative Strength Index (RSI) has failed to show any bullish divergence. These factors point to a lack of buying pressure, further solidifying the notion that the recent price increase was only a temporary relief.
As liquidity pools thin out and market sentiment weakens, the likelihood of SHIB continuing its downward trend grows stronger. Without a significant shift in market conditions or a breakout above key resistance levels, SHIB may continue to face heavy selling pressure, leading to a potential retest of recent lows.
In the current market environment, Shiba Inu faces considerable challenges in sustaining any upward momentum. The hope of erasing a zero from its price seems increasingly unlikely, and investors should remain cautious as the asset battles to hold onto its recent gains.