Shiba Inu Price Drops 10% Amid Bearish Sentiment

Shiba Inu's (SHIB) price has experienced a significant decline, dropping by 10% to $0.00001164 over the past week. This price drop has led to a decrease in the long-short ratio in the perpetual futures market, which has fallen to 0.9298. This ratio indicates the number of active long positions relative to short positions, and a value below 1 suggests bearish sentiment among traders.

The decline in the long-short ratio is attributed to the liquidation of long positions worth over $1.8 million since June 12. This liquidation occurred due to margin shortages, forcing exchanges to close these positions. In contrast, the value of shorts squeezed out during this period was less than $500,000, further emphasizing the bearish sentiment in the market.

Over the past 24 hours, the derivatives market has shown signs of growing caution. Open interest has decreased by 2.14% to $145.33 million, and long liquidations have surged to $244,000, compared to just $57,000 in short liquidations. This indicates that traders are becoming more risk-averse and are closing their long positions to avoid further losses.

Despite the recent price drop, there are some bullish hints on short-duration price charts. SHIB's price has shown a minor recovery from Tuesday's two-month low of $0.00001134, and the cryptocurrency continues to hold support above the critical $0.00001100 level. This support level is crucial for a potential trend reversal, as it indicates that buyers are still interested in SHIB at this price point.

Technical analysis reveals a minor bullish divergence in the daily Relative Strength Index (RSI), with the Moving Average Convergence Divergence (MACD) and signal lines approaching a bullish crossover. This crossover could propel SHIB toward the 23.60% Fibonacci level at $0.00001390, providing further upside potential for the cryptocurrency. Additionally, above-average volume confirmed buyer interest with the closing price of $0.00001170, suggesting stabilization above critical support.

However, the hourly RSI indicates oversold conditions, which could set up for a technical bounce if the $0.00001168 support level holds. This oversold condition suggests that SHIB may be due for a short-term price increase, as traders look to capitalize on the recent price drop and buy the cryptocurrency at a discounted price.