Shiba Inu (SHIB) coin prices have been on an uptrend since Sept. 6, possibly convincing traders that the token had bottomed out and a bull run was on the horizon. The uptrend saw SHIB coin price spike nearly 10% to reach a daily high near $0.0000135
However, the token is not out of bearish waters yet, with technicals and whale movements both highlighting a less than bright future for the memecoin.
Nested Bearish Setups Haunt SHIB Coin Prices
The SHIB USD pair has formed a bearish technical pattern called the ‘head and shoulders pattern‘ within a descending channel.
A higher peak (the head) between two lower peaks (the shoulders) marks the head and shoulders formation, indicating a potential trend reversal from bullish to bearish. The neckline of this pattern is around the $0.00001274 level.
After forming the right shoulder, the SHIB coin price will end testing this level. At the time of writing, it is currently trading near $0.00001356.
The broader descending channel has been in place since March 2024, adding further bearish pressure. SHIB’s price has consistently followed this channel, making lower highs and lower lows.
A confirmed break below the neckline could trigger further declines. Based on the height of the head and shoulders formation, a breakdown could drop the Shiba Inu coin prices by nearly 22%, targeting the $0.00000994 level. This target coincides with the lower bound of the descending channel, amplifying the bearish outlook.
However, if SHIB can defend the neckline and bounce back, the price might attempt to retest the upper channel resistance. Yet, the overall technical picture remains bearish unless the price breaks above the channel’s upper boundary.
It’s Not Just The Technicals
Recent Santiment data shows a clear reduction in whale activity for the Shiba Inu coin, signaling bearish sentiment.
Large holders with 100 million to 1 billion SHIB (yellow line) and 10 million to 100 million SHIB (pink line) have consistently reduced their positions over the past few months. The decline is particularly notable in the 100 million to 1 billion SHIB bracket, which has seen a sharp decrease in holdings.
The drop suggests that major investors are exiting, often viewed as a bearish signal due to their substantial influence on market movements.
Similarly, holders of 1 million to 10 million SHIB (blue line) are gradually selling off, further reinforcing the negative outlook. Although smaller holders in the 100,000 to 1 million SHIB range (red line) are accumulating, their market impact is far smaller than the whale activity.
As such, it seems likely that the Shiba Inu coin is poised for a correction soon, making the recent rally a perfect bull trap for the unsuspecting trader.
