Market Analysis of Shiba Inu’s Volatility
Shiba Inu is currently at a juncture where volatility may soon affect the market, particularly with a technical pattern that could suggest its next steps. Recently, the 50-day EMA has dipped below the 100-day EMA on the daily chart, leading to what analysts are calling a mini death cross. This arrangement signals a potential short-term trend shift downwards, albeit less severe than the conventional 50/200 EMA death cross. Typically, such a crossover indicates early signs of decreasing momentum, especially when accompanied by declining trading volumes.
The recent 40% drop in exchange inflows has further contributed to the bearish sentiment. While lower inflows might point to a reduced number of immediate sell-offs, they also signify dwindling liquidity and a decrease in speculative interest, which spells trouble for SHIB. This combination of technical weakness and lower inflows suggests that the market is hesitant to invest at present levels, making SHIB more vulnerable to volatile movements.
Currently, price action is consolidating within a tightening wedge pattern, hovering around $0.00001236. A few critical levels warrant attention. The immediate support zone stands at $0.00001200; a tumble below this level could accelerate losses.
If the price falls below $0.00001150, it may sharply turn bearish as this level offers a more robust downside cushion. Conversely, reclaiming $0.00001297, which corresponds to the resistance level at the 100-day EMA, would weaken the mini death cross signal. Additionally, surpassing the higher resistance barrier at $0.00001388 (200 EMA) would shift the overall trend back to bullish territory.
The RSI is currently trading around 47, reflecting market indecision and aligning with the broader consolidation phase. The ongoing low trading volumes, in comparison to the highs experienced in July, highlight that neither bulls nor bears have full command of the market.
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For traders, the 50/100 EMA cross serves as a cautionary signal that cannot be overlooked. When viewed alongside the significant decline in exchange inflows, the indicators suggest a short-term bear market. However, SHIB has surprised traders in the past; the mini death cross might soon lose relevance if buyers defend the $0.00001200 level and push beyond $0.00001297. Nevertheless, exercising caution remains advisable for the time being.
