Shiba Inu’s Bearish Storm Could Blow Away SHIB’s Bullish Pattern

NOIDA (CoinChapter.com)—  Shiba Inu is currently experiencing a downturn amid a slew of bearish cues, marked by declining transaction volumes and a mixed market sentiment.

As bearish indicators grow, the memecoin finds itself navigating a challenging period. Over the last seven days, SHIB prices fell nearly 15% to reach a daily low near $0.0000178 on June 21.

Meanwhile, Shiba Inu’s social media marketing lead, Lucie, issued a call to action for investors.

Call to Action Amidst Mounting Shiba Inu Bearish Cues

In an X post, Lucie questioned the current investment behaviors of big investors and companies, suggesting they are more interested in the speculative aspects of the ‘crypto casino‘ rather than in stable, development-focused ecosystems.

The Shiba Inu supporter emphasized the need for seriousness in investment strategies. Moreover, Lucie suggested Shibarium as a “drama-free” and community-driven project.

Recent data supports her concerns. The number of large SHIB transactions have declined, with the 7-day low reaching just 62 transactions on June 16, 2024, and the last 24-hour period recording only 117 transactions.

The decline in large transactions indicates reduced interest from major investors, aligning with Lucie’s critique of the speculative nature of current market investments.

Furthermore, SHIB futures open interest declined, indicating a reduction in speculative activity. The drop suggests that investors are closing their positions, reflecting a lack of confidence in the token’s future price increases

Additionally, SHIB open interest-weighted funding rate reveals suffered fluctuations, with recent dips into negative territory. The funding rate turned negative for the first time since May 3. Negative funding rates indicate that short positions are paying long positions, a clear sign of bearish market sentiment.

The negative signals from both the futures open interest and the funding rates underscore a growing bearish outlook among traders, suggesting caution for those considering investing in SHIB.

All Is Not Lost As SHIB Paints Bullish Pattern

Among all the bearish cues, a ray of hope for SHIB prices comes from a bullish technical setup called the ‘falling wedge.’

A falling wedge pattern features a pair of converging trend lines connecting lower highs and lower lows, forming a narrowing shape that slopes downward.

The pattern typically suggests that an asset’s price, while consolidating in a downtrend, is losing bearish momentum and preparing for a potential reversal to the upside. Typically, a breakout occurs in the direction of the overall trend, which, for a falling wedge, is upward.

To estimate the price target of a falling wedge pattern, traders measure the widest part of the wedge at the beginning of the formation. They then project this distance upward from the point of the breakout to set a potential target.

An accompanying increase in trading volume can further confirm the reliability of the breakout. Higher volume during the breakout suggests stronger market conviction, supporting the likelihood of a successful price reversal.

According to the rules of technical analysis, the Shiba Inu token price could rally over 80% to reach the pattern’s theoretical price target near $0.0000326.

However, with SHIB prices testing the lower trendline support of the wedge and the bearish cues surrounding the memecoin, SHIB risks breaking below and thus invalidaitng the pattern. This could result in more bearish pressure for the Shiba Inu token.