SHIB Price Surge Faces Headwinds as Market Indicators Signal Correction
Shiba Inu (SHIB) has experienced a notable 24% increase over the past week, thanks to a resurgence in investor interest surrounding meme coins. However, several market indicators now suggest that this rally may be losing momentum, raising concerns about a potential price correction.
Indicators Show a Decline in Bullish Momentum
The Bollinger Band Trend (BBTrend) is closely monitored for price movements in Shiba Inu. Despite recent gains, a decline in BBTrend suggests that the buying pressure driving the recent rally may be waning. A weakening BBTrend often precedes either a consolidation phase or a downward retracement. If this trend continues, SHIB may struggle to maintain its current valuation range.
Traders Shift Focus to Short Positions Amid Decreased Confidence
Data from Coinglass highlights an increasing bearish sentiment among traders. Since May 6, the SHIB long/short ratio has consistently remained below 1.0, with the latest reading at 0.96. This figure indicates that more traders are betting against SHIB than those taking long positions, reflecting a growing lack of confidence in its ability to sustain the recent upward trajectory.
Chaikin Money Flow Indicator Signals Declining Buying Pressure
The Chaikin Money Flow (CMF), another vital momentum indicator tracking the inflow and outflow of money, backs the bearish outlook. The CMF for SHIB has been on a downward slope and is nearing the zero neutral line. A fall below this level would signify that selling pressure surpasses buying pressure, often foreshadowing price declines.
SHIB at a Crossroads: Consolidation or Breakout?
Despite the bearish indicators, SHIB’s price holds above key support levels. Should overall sentiment in the cryptocurrency market improve or if interest in meme coins resurfaces, SHIB could still make another attempt at upward movement, with significant resistance observed around $0.000019. Conversely, if the current dynamic continues to weaken, SHIB could slip to $0.000010, erasing much of last week’s gains. The forthcoming direction will likely depend on market sentiment and the ongoing dominance of short sellers.
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