Shiba Inu (SHIB), the popular memecoin, is at a critical juncture. While a recent 4% price surge in the last 24 hours hints at a potential turnaround, a broader bearish trend marked by a 38% drop since late May paints a concerning picture. Investors are grappling with the question: is a price reversal imminent, or will SHIB continue its downward spiral?

The short-term price action offers a glimmer of hope. The 4% increase suggests a gradual build-up of bullish momentum. However, this optimism is dampened by the significant decline over the past few months. As of July 1st, 2024, SHIB sits at $0.00001741, reflecting a meager 0.5% gain in the last week. The trading volume also paints a worrisome picture, dipping by a substantial 38.34% to $135.50 million. This indicates a market lacking activity, suggesting investors are adopting a “wait and see” approach.

Technical indicators offer some insights into SHIB’s potential trajectory. The Relative Strength Index (RSI) sits near oversold territory, historically a precursor to a price bounce. Similarly, the fading bearish momentum on the MACD indicator strengthens the possibility of a reversal.

Looking beyond the technicals, holder composition offers a reason for cautious optimism. Data from IntoTheBlock reveals that a majority (77%) of SHIB holders have maintained their positions over the past year, showcasing a strong foundation that could prevent further price drops. These “diamond hands” investors, as they’re called, might establish a crucial support level for the price.

However, long-term trends raise concerns. The same IntoTheBlock data reveals an 80% decrease in inflows and a staggering 91% reduction in outflows over the past 90 days. This suggests a significant decline in overall SHIB trading activity, potentially due to broader market conditions or waning investor interest.

An analysis by AMBCrypto, considering data from Coinglass, sheds further light on the market sentiment. Despite the lack of a clear direction, long position holders seem to be in control. This, coupled with the recent increase in short-term inflows and decreased outflows, paints a potentially bullish picture for SHIB in the immediate future. The current buying pressure outweighing selling pressure could lead to upward price movements, provided the trend holds.

In conclusion, SHIB’s future remains uncertain. While short-term metrics suggest a potential price reversal, long-term trends and overall market conditions raise concerns. Only time will tell if the bulls can overcome the recent bearish trend and propel SHIB towards recovery.

By Joadin Maina

Beyond the hype, I untangle the web3 revolution, guiding curious minds through the labyrinth of decentralized possibilities.