Shiba Inu (SHIB) Forms Bearish Pattern, Faces 28% Price Decline Risk

Shiba Inu (SHIB) has recently broken below a critical support level, forming a bearish technical pattern on its daily chart. This development has raised concerns about a potential 28% price decline, according to the bearish head and shoulders pattern that has emerged. This pattern is a technical indicator that suggests a reversal in the price trend, often leading to a significant drop in value. The pattern is characterized by a peak (the head), followed by two lower peaks (the shoulders) on either side, indicating that the price has reached a resistance level and is likely to fall. In the case of Shiba Inu, the pattern suggests that the price could drop by 28%, which would be a substantial loss for investors.

Despite a noticeable surge in trading activity, the token is showing signs of weakening momentum, raising red flags for short-term holders. The recent price drop comes at a time when overall market sentiment remains uncertain, adding pressure to already shaky technicals. SHIB is priced at $0.00001257, showing a 2.90% dip in the last 24 hours. This spike in volume could mean a tug-of-war between bulls trying to buy the dip and bears reinforcing the downward pressure. Notably, the token formed a local bottom and started recovering briefly, but failed to breach key resistance.

Support and resistance levels signal a market struggle. The chart shows a reliable support zone between $0.00001180 and $0.00001200. This level acted as a base during SHIB’s recent sell-off and was where consolidation began. Buyers stepped in around this price range, temporarily halting further decline. On the flip side, resistance is building up near $0.00001294 to $0.00001300. This range marks the previous daily high, which the token failed to sustain. Sellers have shown dominance around this level, suggesting that SHIB will need a strong push to break through.

Technical indicators such as the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) have also shown weak momentum for Shiba Inu. The MACD shows both the MACD and signal lines still below zero, indicating that the trend remains bearish. However, the lines are converging, hinting at a possible bullish crossover in the near future. This could slow down the decline or even trigger a short-term recovery. The RSI sits at 39.76, just above oversold levels. It is edging closer to neutral territory. If it crosses above 50, it may confirm a brief bullish trend. Until then, sentiment remains cautious.

SHIB’s tokenomics show that over 410 trillion tokens have been permanently burned from its original supply. The current total supply stands at around 589 trillion, with nearly 4.75 trillion staked as xSHIB. Interestingly, the token burn rate has plummeted by over 63% in the last 24 hours. Only about 5 million SHIB tokens were burned during that time. This slowdown in burn activity may impact long-term supply reduction efforts, especially if demand doesn’t pick up.

Investors are advised to monitor the price movements closely and consider taking appropriate measures to protect their investments. The emergence of the bearish head and shoulders pattern is not the only factor affecting the price of Shiba Inu. Market sentiment, regulatory developments, and other external factors can also influence the price. However, the technical indicators and the bearish pattern suggest that the price of Shiba Inu is likely to decline in the near future. Investors should be prepared for potential volatility and consider adjusting their investment strategies accordingly.