Shiba Inu (SHIB) encountered a significant obstacle, facing rejection at a former support zone. This rejection has pushed the meme coin back into a price range established earlier this month. On-chain metrics reveal increased selling pressure, exacerbating the coin’s current struggles.
Following the rejection from the $0.0000205 level last week, SHIB experienced a nearly 20% price drop. Momentum and buying pressure have both diminished, suggesting the potential for further losses. This decline has alarmed both investors and market analysts.
Previously, the $0.0000205 resistance level was crucial, marking the low of a range SHIB traded within from April to mid-June. A breakout above this range occurred on July 14, indicating a possible bullish trend. However, the price has since fallen below the $0.0000172 support zone, reversing this positive outlook. As of press time, SHIB is trading at $0.0000168, showing a significant upward movement of 2.82% in the past day.
The Relative Strength Index (RSI) shows an increase in bearish momentum. Meanwhile, the On-Balance Volume (OBV), which had shown signs of recovery over the past two weeks, is now in decline. These indicators suggest that SHIB may soon test the $0.0000151 (mid-range) and $0.0000127 (range low) levels.
As Shiba Inu’s price falls back to levels seen before Bitcoin’s surge from $59k to $68k, concerns among long-term holders are growing. This relative weakness underscores SHIB’s difficulties maintaining its value amid broader market volatility.
According to the renowned On-chain platform, Coinalyze, with a sharp price decline on July 17 and 18, Open Interest (OI) in SHIB rose from $57 million to $127 million. This increase indicated a significant influx of short sellers and heightened bearish sentiment. The long liquidations fueled the bearish trend, leading to additional SHIB value declines.
Since then, the metrics have slightly recovered, and the OI continues to fall, reflecting a persistent bearish outlook. Despite a marginally positive funding rate, the recent wave of long liquidations has made speculators and swing traders wary of taking long positions.
Shiba Inu’s recent difficulties highlight a critical point for cryptocurrency. With growing selling pressure and bearish sentiment, the coming days will be crucial in determining whether SHIB can stabilize or if further declines are ahead. The community and investors closely monitor the situation, hoping for signs of a potential recovery.
