Is Shiba Inu's Price Rebound Merely an Oversold Bounce or a Prelude to Deeper Selling Pressure?

Shiba Inu (SHIB), the meme coin that once captured the crypto market's imagination, has entered a critical juncture. Recent price action suggests a tentative rebound, but technical and on-chain data tell a more nuanced story. Investors must ask: Is this a fleeting oversold bounce, or does it mask deeper bearish momentum?

Technical Analysis: Oversold Conditions Without Conviction

SHIB's Relative Strength Index (RSI) currently hovers at 32, signaling oversold territory. However, the absence of bullish divergence-a key indicator of a sustainable reversal-casts doubt on the strength of this bounce, according to a Coinotag analysis. The Moving Average Convergence Divergence (MACD) has shown mixed signals: while a recent upward trend in the indicator hinted at potential bullish momentum, as Coinotag reported, the formation of a "death cross" (50-day MA crossing below the 200-day MA) has reinforced bearish control, according to a U.Today report.

Price action remains constrained within a tightening range, with critical support at $0.058472 and resistance at $0.059248, according to a CryptoNewsLand analysis. A recent 2.49% gain pushed SHIB above the $0.059964 support level, but this move lacks conviction, as the token remains below its 50-day, 100-day, and 200-day moving averages, according to a CryptoNewsLand note. The next resistance at $0.00001025 will be a pivotal test of buyer interest.

On-Chain Metrics: Accumulation Amid Declining Liquidity

On-chain data reveals a paradox: while SHIB has seen a net outflow of -147.7 trillion tokens in the past 24 hours-suggesting accumulation by long-term holders, as noted in the U.Today report- a more recent Coinotag report notes a -272.9 billion SHIB outflow, underscoring declining liquidity and investor confidence. This discrepancy points to whale activity, such as storage or hedging, rather than genuine retail accumulation.

A massive sell-off of 1 billion SHIB tokens in the last 24 hours has pushed the price below $0.000010, raising concerns about further declines, according to the U.Today piece. Despite these outflows, wallet distribution data shows tokens being moved off exchanges into private wallets, a sign of potential accumulation. However, this trend has not translated into price stability, highlighting a disconnect between on-chain behavior and market sentiment.

Catalysts: Mixed Signals for Institutional and Supply Dynamics

Recent catalysts have introduced complexity. The U.S. Securities and Exchange Commission (SEC) filing by T. Rowe Price, which lists SHIB as an eligible asset for a proposed crypto ETF, has generated short-term bullish momentum, as Coinotag reported. This development aligns with a descending wedge pattern on the price chart, suggesting a potential breakout.

Meanwhile, SHIB's burn rate surged by 1,993%, with over 10 million tokens burned, reducing supply and theoretically supporting long-term value, as Coinotag also noted. Yet these positive fundamentals are overshadowed by the 1 billion SHIB sell-off and the death cross formation. Institutional interest may provide a floor, but it remains unclear whether this will outweigh the bearish technical and on-chain pressures.

Conclusion: A Fragile Rebound Amid Structural Weakness

SHIB's current rebound appears to be a textbook oversold bounce, driven by short-term catalysts and technical exhaustion. However, the lack of bullish divergence in RSI, the death cross, and the massive sell-off indicate that bearish momentum remains intact. While the ETF filing and token burns offer hope, they are insufficient to counteract the broader trend of declining liquidity and whale-driven selling.

Investors should treat any near-term gains as a tactical opportunity rather than a reversal signal. A break above $0.00001025 could test the resilience of bullish sentiment, but until SHIB shows sustained volume and a clear breakout from its tightening range, deeper selling pressure remains a significant risk.