NOIDA (CoinChapter.com) — Shiba Inu’s recent price rally significantly impacted traders who positioned themselves against the asset, anticipating a decline. As a result, SHIB shorts got ‘rekt‘ due to massive liquidations.
The development highlights the unpredictable nature of the crypto market and the risks associated with speculative trading.
Shiba Inu Shorts Liquidations Spike
A broader look at SHIB’s market activity reveals extensive liquidations affecting both sides of the trade, but recent data highlights the plight of the short positions. The recent spate of bullish cues from Shiba Inu’s developers and broader market sentiments have helped SHIB price go ballistic.
The total value of liquidations reached $27.1 million in March 2024, with Shiba Inu shorts enduring larger losses at $16.9 million compared to $10.2 million for long positions.
Moreover, the massive liquidations likely forced traders to buy more tokens to cover their margins, increasing buying pressure and pumping SHIB’s price rally. The recent SHIB price rally also saw the highest single-day short liquidations since Dec. 2023.
Such events stress the importance of cautious trading strategies, especially in markets known for sudden and sharp price movements.
The recent price behavior of SHIB and the resulting liquidations underscore the critical need for risk management in cryptocurrency trading. The market’s ability to move quickly and substantially can lead to considerable financial losses, particularly for those utilizing leverage.
SHIB Price Targeting $0.00004 Level
Meanwhile, SHIB price broke above the $0.00004 level for the first time since Dec. 2021, highlighting the bullishness of the token’s momentum. Shiba Inu bulls propelled the token 267% in March 2024, pushing the token to a daily high near $0.0000456 on March 5.
However, the supply wall near $0.000043 rebuffed the memecoin’s price action, hinting that bears are booking profits near the price level. However, breaking past the immediate resistance could help SHIB price target the resistance near $0.0000554.
The relative strength index, or RSI, has remained in the overbought region for SHIB for a week, clocking at 98.28 on the daily charts on March 5. The RSI is a momentum indicator for measuring asset price movements to identify overbought or oversold conditions.
Overbought RSI levels and upward-moving average trendlines indicate a strong presence of bulls in the market. However, traders often consider an overbought RSI level a bearish signal since the occurrence usually precedes a bearish reversal or consolidation phase for the underlying token.
As such, a correction would likely force SHIB price to the support near $0.000031. Moreover, breaking below the immediate support level might see the Shiba Inu token price drop to the support near $0.000022 before recovering.
