Shiba Inu's Bullish Reversal Signal: A Flow Analysis

The core signal is a bullish rejection candle with a long lower wick, indicating aggressive buying at local lows. This formation typically emerges when selling pressure begins to fade, and demand starts absorbing supply at lower price points. The pattern suggests bears may be losing momentum after weeks of downward movement.

The specific price action confirms the bounce. Shiba Inu recovered 10% from a session low at $0.0000062, trading near $0.00000685 after that low marked the token's lowest level since late 2024. This recovery comes as derivatives traders rebuild positions, with open interest climbing 7.04% to $78.16 million.

Crucially, this pattern emerges as SHIB held above critical support while other major cryptos struggled. The token maintained its broader range instead of cascading lower during Bitcoin's recent breakdown, suggesting relative strength. Assets that demonstrate this resilience during market-wide selling often lead recovery phases, pointing to potential accumulation even as broader sentiment remains negative.

Derivatives Flow and Market Sentiment

The derivatives market shows a clear, if cautious, rebuild of positions. Open interest in SHIB futures has climbed 7.04% to $78.16 million, a move that signals traders are adding new contracts rather than simply closing out. This flow indicates a willingness to take on risk, suggesting some conviction that the recent lows may hold. The total open interest of over 12.29 trillion SHIB highlights the sheer scale of this commitment, even as the broader market remains weak.

Sentiment within the derivatives market remains slightly bearish. The long/short ratio sits at 0.86, meaning for every dollar of long positions, there is $1.16 of short bets. This slight short bias reflects a market still digesting the recent crash and a lack of overwhelming bullish conviction. It's a setup where traders are positioning for a bounce but are hedged against a deeper breakdown.

The liquidation data provides a key context for this positioning. Despite the price drop, liquidations over the past 24 hours were relatively low at $48.21K. This suggests the market was not overly leveraged heading into the selloff, which reduces the risk of a cascade of forced selling. The lower burn rate, with only 3.72 million SHIB burned in the past day, contrasts with the derivatives flow, showing community activity has cooled even as futures traders rebuild.

Catalysts, Risks, and Key Levels

The immediate bullish path hinges on a decisive break above the $0.0000080 level. This acts as a key resistance barrier, and a sustained close above it would signal the rejection of the recent downtrend. The medium-term target for such a move aligns with analyst forecasts at $0.0000085. Achieving this would require a shift in momentum indicators, with the RSI breaking above 50 and the MACD histogram turning positive, confirming that buying pressure is overcoming the current bearish structure.

The primary catalyst for any sustained rally remains a broader market recovery, specifically a sustained rebound in Bitcoin. SHIB's price action is heavily correlated to Bitcoin and functions as a leveraged play within the meme coin sector. As noted, Bitcoin's Friday recovery matters for Shiba Inu because it anchors market confidence. When Bitcoin stabilizes, large investors redeploy capital across the crypto complex, and retail traders rotate into speculative names that can move faster than Bitcoin itself. Without this macro boost, SHIB's own momentum faces an uphill battle.

On the downside, the immediate risk is a break below the recent session low of $0.0000062. A close below that level would expose the next major demand zone at $0.0000055. This would invalidate the current bullish rejection signal and likely trigger further selling, as the token would be seen as losing its local support. The market's current slight short bias in derivatives and the token's position well below all major moving averages underscore the vulnerability to such a breakdown.