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SHIB Shiba Inu has performed poorly this week. Analysis of the reasons for the price decline and potential reversal signals
Shiba Inu does not seem to have been spared the decline this week. SHIB prices have fallen by approximately 0.65% in the past 24 hours and by approximately 8% in the past seven days, making it one of the worst performing currencies among all major memes.
Interestingly, there were no major negative events in the SHIB itself. The current trend is more like part of an overall sell-off wave of altcoins, which means that if market sentiment improves, the weakness may fade quickly.
The real reason for the decline in SHIB
However, the most important factor seems to be the withdrawal of funds from risky cryptocurrencies. The "Altcoin Seasonal Index" on CoinMarketCap has dropped to 36, down nearly 2.7% in just one day, indicating that money is leaving the altcoin market. On the other hand, Bitcoin's dominance remains at about 59%, while cryptocurrency trading volume has dropped by nearly 38%. When markets begin to become cautious, memeins always bear the brunt.
Another factor that restricts the price of SHIB is the large number of tokens still placed on the exchange. CoinTurk Media reported that exchange reserves remain at approximately 87.5 trillion SHIB, which constitutes a huge supply of potential sellers.
We analyzed the latest exchange traffic data and found a very interesting pattern. More than 150 billion SHIB tokens flowed into exchanges, a trend that coincided with prices falling to the $0.0000495 region. When the inflow stopped, the price fell back to around $0.0000460.
More positive signs have since emerged. Net flows on August 8 and 9 were negative. On one day, 100 billion SHIB tokens flowed out of the exchange, and on the other day, more than 80 billion SHIB tokens flowed out.
Signals revealed by the SHIB chart
We also observed the SHIB chart, and it is clear that the rally launched at the end of July in the range of US$0.0000400 to US$0.0000600 has lost momentum. After hitting the above level, SHIB prices continued to fall.
The key level to focus on at this time is the downward resistance line at US$0.00000470. The current SHIB price is US$0.0000462. The momentum indicator remains weak, with the RSI close to 39, below neutral and close to oversold territory. This looks like a bearish signal, but prices are falling while volume is shrinking. In this case, a decline in shrinkage suggests that seller power is weakening.
Why the SHIB price may reverse soon
To strengthen bearish logic, the SHIB price must fall below the support level of US$0.0000455 to US$0.0000457. If that happens, traders may look to $0.0000450, then to the level of about $0.0000400 before the rebound.
The bullish scenario is more straightforward. If buyers can push the SHIB price back above US$0.0000470 and the transaction volume expands, the next target will be US$0.0000500. This level is important because many traders view it as a key point to confirm a stronger rally.
As a result, today's sell-off does not look like a new crash, but more like a continuation of the overall correction in altcoins. As exchange outflows increase and sales shrink, there is still a reasonable opportunity for SHIB prices to rebound if buyers continue to hold on to the current support area.
