Shiba Inu: SHIB is crashing but what will happen after this

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Disclaimer: The following analysis is the sole opinion of the author and should not be considered investment advice.

  • Shiba Inu has abandoned the 200 EMA as it does not change the long term picture.
  • 30-day MVRV and open interest for crypto memes are matched with respective discounts.
    (In short, the SHIB price from now on multiplied by 1000)

Shiba Inu sellers (SHIB) expressed willingness to cancel the recent buying surge on the daily bar chart. The meme was unable to break the upper bound of the $0.0129 resistance near its high liquidity range.

The recent bearish bias forced a break below the 20 EMA (red) and 50 EMA (cyan) to confirm the increased selling momentum. The $0.0103 support could play an important role in watching the coin's exit opportunities.

At press time, SHIB is trading at $0.0108, down 8.57% over the past 24 hours.

Price chart analysis

Source: TradingView, SHIB/USD

The SHIB has shown a strong correlation with the Dogecoin rally after rising from the benchmark support at $0.0099, with an ROI above 34%.

This bounce marks a bullish flag structure on the daily timeframe. SHIB dropped below the critical resistance at $0.012 (the previous support) after the company rejected a higher price near the $0.013 mark. Therefore, the bears have invalidated the uptrend on this position.

When the 20 EMA (red) reappears south, buyers should watch for a bearish crossover with the 50 EMA (cyan).

Any immediate or eventual buying opposition could encounter a hurdle near the $0.018 resistance level. A reversal from this top could represent a short-term opportunity. A close above this level can retest the resistance at $0.013.

If the SHIB sustains the newly found selling pressure, the first major support area is likely to continue in the $0.0104-$0.00985 range.

Also, at press time, the Relative Strength Index (RSI) has broken below its moving averages while moving south. Persistent impacts below 50 will continue to hamper buying attempts.

However, buyers should look for a possible bounce back from the on-balance volume (OBV) support. A convincing rally could create room for a bullish divergence.

SHIB's 30-day MVRV

Source: Emotions

According to data from Santiment, the recent drop in SHIB implies a negative position in its 30-day MVRV indicators. This reading merely hints at a slight upside for the bears and corroborates the weak results on their daily technical data.

Source: Coinglass

First, the token's open interest has fallen by more than 16.5% in the past 24 hours. This drop mimics a drop in price action but to a greater extent.

Buyers can monitor any improvement in open interest swings for 24 hours to gauge the chances of a reversal.

Furthermore, alt shares a 30-day correlation of 88% with Bitcoin. Therefore, tracking Bitcoin's movement with overall market sentiment may be essential to identify any bullish invalidation.

 

Nov 09, 2022

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