Disclaimer: The information presented does not constitute financial, investment, trading or other type of advice and is solely the opinion of the author
- Uncertainty and fear across the market means the conditions are ripe for another drop in prices.
- This can come with significant volatility, so risk management remains critical.
Shiba Inu noted a loss of nearly 20 percent in ten days after breaking below the $0.000012 support level. Recently, strong selling pressure forced SHIB to leave an imbalance on the charts, retesting before the price continued to plunge.
read Shiba Inu’s [SHIB] Price Forecast 2023-24
Now, that imbalance has reappeared. However, the response in this area is not as clean as before. Is this a sign that a reversal is coming, or will the bears continue to take profits on the meme token?
History doesn’t repeat itself, but it often does
Two fair value gaps on the 4-hour chart are highlighted in white. The RSI has been below the neutral 50 for the past two weeks, indicating strong bearish momentum and a downtrend. The market structure is also bearish on the H4 and D1 timeframes. Therefore, the bias for Shiba Inu is bearish.
OBV has also been falling, in line with the trend and highlighting steady selling pressure. In the south, the $0.00000943 and $0.0000088 levels are worth watching as these are two levels that the price has observed since November, especially $0.00000943.
Unlike earlier floods into FVG and rejections, getting into the imbalance the past few days has not been a quick rejection. That suggests buyers are likely to gain a foothold in the market.
Bitcoin faces significant resistance from $20,600 to $21,200, which could shed more light on price action on Monday. BTC and many altcoins are likely to see small gains to capture liquidity above local highs this weekend. For Shiba Inu, such a move would take it to the $0.0000105 area.
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After this false rally, the price may continue to decline in the previous downtrend. SHIB needs a close above $0.0000105 to suggest a bullish structure.
Even then, the bearish breakout could meet resistance at $0.0000109. Therefore, more cautious traders may choose to wait for more clarity rather than attempt to short the asset.
Positive funding rate but poor sentiment
Funding rates were positive over the weekend, suggesting sentiment may be starting to shift in favor of buyers. However, despite a modest 3.5% rally in prices over the past 24 hours, there has been no significant increase in open interest.
This highlights that long positions are being discouraged and the implied bearish sentiment is strong. However, conditions across the market are fraught with risks for both buyers and sellers, and risk management is, as ever, a top priority.
The evidence at hand suggests that Shiba Inu is highly likely to see a continuation of the downtrend over the next week.
Source of information: Compiled from AMBCRYPTO by 0x Information.Copyright belongs to the author, without permission, may not be reproduced