Shiba Inu Faces 67% Bearish Momentum as Death Cross Looms

Shiba Inu (SHIB) is on the brink of a technical breakdown as the cryptocurrency market shows signs of a dreaded “death cross” formation. The meme-inspired cryptocurrency is currently below its key moving averages, indicating growing market weakness. Analysts and investors are becoming increasingly cautious, as both price structure and on-chain data suggest mounting bearish momentum.

In technical analysis, a death cross occurs when the 50-day moving average crosses below the 200-day moving average. This is widely seen as a signal that short-term bullish momentum has been overtaken by long-term bearish sentiment. Recent price movements in SHIB have brought these two lines dangerously close, fueling speculation of an imminent breakdown. If this crossover materializes, it could trigger both algorithmic sell orders and stop-loss mechanisms from retail traders, potentially sending SHIB back to its prior lows.

On-chain metrics further validate the bearish sentiment. Over 67% of SHIB holders are currently underwater, holding their tokens at a loss. This statistic highlights the market's susceptibility to panic-driven exits, especially during times of volatility. Large transaction volumes have also shrunk significantly, dropping from the recent $105.5 million range to notably lower levels. This suggests that whale wallets are scaling back their exposure. Additional indicators such as declining network growth and transaction count further underline the loss of momentum, painting a grim short-term outlook.

As a memecoin, Shiba Inu relies heavily on community enthusiasm. However, recent trends show that engagement is fading. The number of users in SHIB-focused Telegram groups has declined by 0.39% in the last week, and mentions across social platforms are down, along with user interaction. When the narrative surrounding a memecoin weakens, price support becomes difficult to maintain. Without a compelling community push or strong buy-side interest, the probability of revisiting previous lows increases. This weakening sentiment is causing retail traders to reevaluate their positions while whales quietly exit the scene.

Without a clear support base, SHIB’s current price action appears vulnerable. While a short-term relief rally is possible, analysts warn that any such movement could be a “dead cat bounce” unless backed by improved fundamentals and renewed investor interest. Unless SHIB regains traction both technically and socially, its path forward may continue downward, dragged by market mechanics and community fatigue.